Question 1: Some have argued that a lump sum tax is the most equitable and efficient system of taxation. If lump sum taxes are so efficient and equitable, why aren't they widely used?
Question 2: In 2002, the US federal government levied a tax of 3 percent on that part of a car's price exceeding $40,000. (For example, the tax liability on a $50,000 car would be 0.03 ($50,000 - $40,000), or $300.) Please tell me what is the efficiency, equity, and administrability of this "luxury car tax."
Question 3: What an ad valorem tax is and cite an example of such a tax. So is this form of taxation an effective way for state and local governments to increase revenue?