Answer to Question #248083 in Macroeconomics for MAx

Question

Which one of the following statements regarding taxation is correct?

A. Administrative simplicity in the tax system ensures neutrality and equality.

B. The aim of taxes is to distort relative prices and change the behaviour of taxpayers.

C. In a good tax system, various taxpayers with different income are taxed the same.

D. Taxes which induce taxpayers to change their behaviour are not neutral.

Answer 1

D. Taxes which induce tax payers to change their behavior are not neutral.