Discussion
A proportionate increase in tax revenue to a proportionate increase in the tax base is called
Answer: B
The ratio of the proportionate increase in tax revenue to the proportionate increase in the tax base, in the question's wording, is the buoyancy of a tax, the second option. Buoyancy measures the total response of revenue to the growth of income including discretionary changes in rates and coverage. Elasticity measures the response with the tax structure held constant, so it excludes the discretionary changes, and neutrality is a different principle of taxation.
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