Affirmative and negative majority votes can sometimes lead to inefficient alloca

Question

Affirmative and negative majority votes can sometimes lead to inefficient allocations of resources to public goods. Is this problem likely to be greater under a benefits-received or an ability-to-pay tax system? A) An ability-to-pay tax system because the users of the public goods are the ones who will pay for it. B) An ability-to-pay tax system because there is a mismatch between the beneficiaries of the public good and those who bear the cost. C) A benefits-received tax system because the users of the public goods are the ones who will pay for it. D) A benefits-received tax system because there is a mismatch between the beneficiaries of the public good and those who bear the cost.

Explanation / Answer

D) A benefits-received tax system because there is a mismatch between the beneficiaries of the public good and those who bear the cost. is the answer

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