Why must the tax rate on a general tax on consumption exceed that of a general tax

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Why must the tax rate on a general tax on consumption exceed that of a general tax on income if the two are to raise the same revenue?

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Public Finance A Contemporary Application Of Theory To Policy

ISBN: 9780538754460

10th Edition

Authors: David N Hyman

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Question Posted: Aug 15, 2023 02:30 PM

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Why must the tax rate on a general tax on consumption exceed that of a general tax

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The question youve provided touches upon an economic principle known as the equivalence theorem in public finance which explains the relationship betw...View the full answer

Public Finance A Contemporary Application Of Theory To Policy

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