Introducing Supply and Demand
Taxes
Elements of a Good Tax System
- Efficient: A tax system should raise the necessary revenues without unduly burdening the taxpayer.
- Understandable: A tax system should be easily understandable by the average citizen who has to pay the tax.
- Equitable: The tax burden should be distributed equitably among a nation's citizens. Generally, this means that those that are wealthier should pay more.
- Benefit Principle: Generally, the people who use public services should pay for them with higher taxes. However this principle is difficult to enforce in practice.