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Lumpsum Tax

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PPGPortal > Home > Concept Dictionary > K, L, M > Lumpsum Tax

Lumpsum Tax 

When the government takes away some fixed amount of money, regardless of the individual’s behaviour.

(Varian, Hal R. 2010. Intermediate Microeconomics: A Modern Approach, 8th ed. New York: W.W. Norton, p.27.)


When a lumpsum tax is implemented, the budget line of a consumer will shift inward because his money has been reduced.


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