The Major Objective of the 1986 Tax Reform Was To

question 190

Multiple Choice

The major objective of the 1986 tax reform was to: (i) enhance efficiency by lowering marginal tax rates; (ii) enhance equity by closing "loopholes."

• A)i and ii 
• B)i but not ii 
• C)ii but not i 
• D)neither i nor ii

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Definitions:

Marginal Decisions

Decisions made based on the additional benefit or cost of consuming or producing one more unit of a good or service.

Additional Costs

Are extra costs that may not have been initially accounted for or that occur beyond the expected costs of production or operations.

Additional Benefits

The perks or supplementary advantages that come in addition to the primary benefits of a product, service, or policy.

Marginal Analysis

Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.