Author Question: Other things being equal, corrective taxation is superior to regulation in the long run because it ... (Read 57 times)

Wadzanai · **on:** Jul 1, 2018

Other things being equal, corrective taxation is superior to regulation in the long run because it _____.

a. gives the producer an incentive to find a way to reduce external costs
b. the tax revenue can be used as compensation
c. the tax revenue can be used on other parts of the budget
d. is more burdensome on the producers of the externality

Question 2

The double taxation of capital gains can be justified _____.

a. on the ability-to-pay principle
b. on efficiency grounds
c. on the grounds that government needs more revenue
d. on the benefit principle