Are the following statements true or false?
a. The theory of optimal commodity taxation argues that equal tax rates should be set across all commodities so as to maximize exigency by ‘‘smoothing taxes.''
b. In the United States prescription drugs and CDs are taxed at the same rate of 10 percent. The Ramsey rule suggests that this is the optimal tax policy.
c. Some economists have proposed replacing the income tax with a consumption tax to avoid taxing savings twice. This is a good policy both in terms of exigency and equity.