What standard evaluates the overall ability of a tax system to generate necessary revenues?

The concept of sufficiency in the context of a tax system refers to its ability to generate adequate revenue to meet the needs of government spending and services. A tax system that is deemed sufficient ensures that there is enough income being collected to fund public expenditures, such as infrastructure, education, healthcare, and other essential services. This is critical for maintaining the functions of government and addressing public needs.

While other standards like equity, efficiency, and clarity are also important in evaluating a tax system, they serve different purposes. Equity focuses on fairness in taxation – who pays how much, ensuring that the tax burden is distributed appropriately across different income levels. Efficiency pertains to the economic impact of the tax system, ideally minimizing distortions in the economy and not discouraging productive behavior. Clarity emphasizes the simplicity and understandability of the tax laws, which can lead to better compliance and administration.

Thus, the standard that specifically evaluates whether a tax system can generate enough revenue is sufficiency, making it the key focus in this context.