Question

If the United States government raises the income taxes on the wealthiest Americans, while increasing welfare payments to the poorest Americans, the result will likely be ________ in efficiency and ________ in equality in the United States.

Answer 1

Answer:

The correct answer is: a decrease; an increase.

Explanation:

What can be done? Pressing the rich to pay their taxes does not work. Often, tax administrations are too weak to disturb the rich. On the contrary, governments must be able to persuade the rich that progressive taxes favor their interests and provide them with important benefits, such as infrastructure development, security and essential public services. Defining and maintaining a tax contract between both parties is crucial. And that, in turn, requires that governments have credibility, that is, the credibility that any commitment they acquire will endure over time instead of being discarded each time a new ruler is elected.