Question

When evaluating a tax system, __________________ suggests that the system should be designed to facilitate the collection of tax revenues without undue hardship on the taxpayer or the government.

A) Efficiency
B) Adequacy
C) Simplicity
D) Fairness

Answer 1

The adequacy principle suggests that a tax system should be designed to facilitate the collection of tax revenues without undue hardship on the taxpayer or the government.

Step-by-step explanation:

When evaluating a tax system, adequacy suggests that the system should be designed to facilitate the collection of tax revenues without undue hardship on the taxpayer or the government. Adequacy ensures that the tax system is able to generate enough revenue to fund government programs and services while also considering the financial capabilities of taxpayers. For example, a progressive tax system, where higher-income individuals pay a higher percentage of their income in taxes, can be considered adequate because it takes into account the ability to pay principle.