Unformatted text preview: -Primary aim of a tax system is to raise revenue for the government, but there are many ways to raise any given amount of money Deadweight loss - the reduction in economic well-being of taxpayers in excess of the amount of revenue raised by the government. Administrative burden -Horizontal Equity-horizontal equity: the idea that taxpayers with similar abilities to pay taxes should pay the same amount-problem: difficult to agree on what factors, besides income, determine ability to pay Why Do Firms stay in business if profit = 0?-Recall, economic profit is revenue minus ALL costs-including implicit costs, like the opportunity cost of the owner’s time and money-in the zero-profit equilibrium,-firms earn enough revenue to cover these costs-accounting profit is positive...
View Full Document
This note was uploaded on 02/08/2012 for the course ECONOMICS 220:102 taught by Professor Zhang during the Fall '09 term at Rutgers.
- Fall '09