10) For optimal tax, which of the following rules are true? A) Broad base rule: Better to tax a wide variety of goods moderately than few goods heavily. B) Ramsey rule (the elasticity rule): Lower taxes on goods with more elastic demand. C) Raising tax will likely affect the size of the tax base. Try to tax on subjects that are not under the control of individuals or inelastic subjects. D) The efficiency impact of a tax or subsidy cannot be considered in isolation. E) We had better strengthen the tax-benefit linkage. F) Tax smoothing over periods.
10) For optimal tax, which of the following rules are true? A) Broad base rule: Better to tax a wide variety of goods moderately than few goods heavily. B) Ramsey rule (the elasticity rule): Lower taxes on goods with more elastic demand. C) Raising tax will likely affect the size of the tax base. Try to tax on subjects that are not under the control of individuals or inelastic subjects. D) The efficiency impact of a tax or subsidy cannot be considered in isolation. E) We had better strengthen the tax-benefit linkage. F) Tax smoothing over periods.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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