Question

Which of the following describes why corrective taxes, such as the gasoline tax, are unlike most other taxes?


Corrective taxes alter incentives, whereas other taxes typically do not.

Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency.

Other taxes are typically used to cover general spending, but funds from corrective taxes can be used only to alleviate pollution.

Other taxes get passed on from businesses to consumers, whereas corrective taxes do not.