Chapter 2, Problem 2QPD

What evidence suggests that the federal tax system receives a low grade when evaluated on the standard of sufficiency?

To determine

Explain the evidence that suggests the federal tax systems receive a low grade while evaluated on the standard of sufficiency.

Explanation of Solution

Historically, the federal income tax system does not generate the sufficient revenue to meet the government’s expenses. Therefore, government borrowed money to meet their deficit and national debt of $11 trillion. Deficit year faced by the government is 1970 to 1998. During 1999 and 2000 government earned small amount of surplus but reverted to massive deficit after spending in 2001 and subsequent years.