ECS4866
Assignment 2
|594502|
DUE: 28 AUGUST 2026
, ADVANCED PUBLIC ECONOMICS
ECS4866
ASSIGNMENT 02
Unique Number: 594502
Due Date: 28 August 2026
Based on Study Units 5, 6, 7, and 8
Question 1: Errors and Half-Truths in Tax Statements
(a) Poll Tax (Head Tax) – Efficiency, Equity, and Universality
The statement is partially correct regarding efficiency but is fundamentally misleading
on equity, and incorrect about universal coverage in South Africa.
A poll tax (head tax) is a fixed levy imposed equally on every individual, regardless of
income, wealth, or economic activity. From a narrow efficiency standpoint, it is true
that a lump-sum tax theoretically causes no excess burden (deadweight loss),
because it does not distort relative prices or alter marginal decisions to work, save, or
invest (Rosen & Gayer, 2014). In this very limited sense, the efficiency claim has
merit.
However, the statement is incorrect when it claims that a poll tax promotes equity.
Both vertical and horizontal equity are violated. Vertical equity requires that individuals
with greater ability to pay bear a proportionately heavier tax burden. A poll tax, by
imposing the same absolute amount on every person irrespective of income, is
regressive in nature: it constitutes a far greater proportion of income for poor
Assignment 2
|594502|
DUE: 28 AUGUST 2026
, ADVANCED PUBLIC ECONOMICS
ECS4866
ASSIGNMENT 02
Unique Number: 594502
Due Date: 28 August 2026
Based on Study Units 5, 6, 7, and 8
Question 1: Errors and Half-Truths in Tax Statements
(a) Poll Tax (Head Tax) – Efficiency, Equity, and Universality
The statement is partially correct regarding efficiency but is fundamentally misleading
on equity, and incorrect about universal coverage in South Africa.
A poll tax (head tax) is a fixed levy imposed equally on every individual, regardless of
income, wealth, or economic activity. From a narrow efficiency standpoint, it is true
that a lump-sum tax theoretically causes no excess burden (deadweight loss),
because it does not distort relative prices or alter marginal decisions to work, save, or
invest (Rosen & Gayer, 2014). In this very limited sense, the efficiency claim has
merit.
However, the statement is incorrect when it claims that a poll tax promotes equity.
Both vertical and horizontal equity are violated. Vertical equity requires that individuals
with greater ability to pay bear a proportionately heavier tax burden. A poll tax, by
imposing the same absolute amount on every person irrespective of income, is
regressive in nature: it constitutes a far greater proportion of income for poor
