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maximum
social
advantage
meaning
DALTON ; The best system
Assumptions :
Taxes are the major source of government
revenue
The law od diminishing marginal social
advantage applies to the public expenditure
The taxes are subject to increasing marginal
social disutility
Conditions :
The social benefit from the rupee spent on
Significance
INCREASE IN PRODUCTION : in order to
Limitations :
Measurement of both sacrifice and benefit is
difficult
It is difficult to make an estimate of maximum
social advantage on the basis of future
advantages and present sacrifices.
It is difficult to estimate how much effect each
tax individually has on public
Collecting revenue through taxes creates
disutility
It is incorrect to assume that each tax
involves burden on the people.
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