USA HISTORY

Detailed explanation-1: -The inefficiency of any tax is determined by the extent to which consumers and producers change their behavior to avoid the tax; deadweight loss is caused by individuals and firms making inefficient consumption and production choices in order to avoid taxation.

Detailed explanation-2: -Tax evasion is one of the major challenges for the taxation system in India. The amount of money evaded generates an illegal hoard which is called black money.

Detailed explanation-3: -The tax system should be fairly efficient while effecting revenue mobilisation in response to growth. And the tax system is efficient if it is income elastic so that revenue grows slightly faster than GDP.

Detailed explanation-4: -Some of the causes of tax evasion are the existence of tax havens, higher tax rates, lack of integrity on the part of the citizens, presence of informal economy, lack of simplicity in the tax legislations, inefficiency of tax administration etc.