(BQ) Part 2 book "Principles of microeconomics" has contents: The costs of production, firms in competitive markets, monopolistic competition, the markets for the factors of production, the monetary system, the influence of monetary and fiscal policy on aggregate demand,.and other contents. | CHAPTER The Design of the Tax System. I Get an overview of how the In this chapter you will . government raises and spends money Examine the efficiency costs of taxes learn alternative ways to judge the equity of a tax system See why srudying tax incidence is crucial for evaluating tax equity Consider the trade-off between efficiency and equiry in the design of a tax system Outcomes After accomplishing these goals, you should be able to List the four largest sources of tax revenue to the . government from the largest to the smallest source Describe the administrative burdens of a tax Compare the benefits principle to the ability-to-pay principle of allocating a tax burden Explain why the burden of a tax often lands on someone other than the person from whom the tax is collected Discuss the efficiency and equiry of a flat tax 187 PART IV 188 THE ECONOMICS OF THE PUBLIC SECTOR Chapter Overview Context and Purpose Chapter 12 is the third chapter in a three-chapter sequence on the economics of the public sector. Chapter 10 addressed externalities. Chapter 11 addressed public goods and common resources. Chapter 12 addresses the tax system. Taxes are inevitable'because when the government remedies an externality, provides a public good, or regulates the use of a common resource, it needs tax revenue to perform these functions. The purpose of Chapter 12 is to build on the lessons learned about taxes in previous chapters. We have seen that a 'tax reduces the quantity sold in a market, that the distribution of the burden of a tax depends on the relative elasticities of supply and demand, and that taxes cause deadweight losses. We expand our study of taxes in Chapter 12 by addressing how the US. government raises and spends money. We then address the difficulty of making a tax system both efficient and equitable. Chapter Review Introduction Taxes are inevitable because when the government remedies an .
