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Briefly describe the five main steps in the formulation of compensation strategy.
Tax Distortion
Describes how taxes can alter market behavior and lead to efficiency loss compared to an untaxed market.
Optimal Taxation
The theory or practice of determining the most efficient and effective way of levying taxes to generate government revenue with minimal economic distortion or inefficiency.
Excess Burden
The societal expense resulting from market inefficiency, which arises when supply and demand are not in balance.
Progressive
A term often used in the context of taxation or political ideology, indicating policies or stances that aim to redistribute resources from the more affluent to the less affluent.
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