What term describes a comparison of actual tax collections to tax capacity?

The term that accurately describes a comparison of actual tax collections to tax capacity is known as tax effort. This concept is essential for assessing how effectively a jurisdiction is utilizing its tax capacity to generate revenue. Tax capacity refers to the potential revenue that could be collected if the tax rates were applied to the base of taxable properties or income in a given area. By comparing actual collections to this capacity, one can evaluate the extent to which a jurisdiction is exerting effort to collect taxes owed.

Tax effort highlights disparities in the ability of different jurisdictions to collect taxes based on various factors, such as economic conditions, tax policy, and administrative efficiency. It serves as an important metric for policy evaluation, revealing how well a municipality or region is performing in maximizing its fiscal resources relative to what could theoretically be raised.

Other options do not convey the same meaning. For example, tax efficiency relates to how well a tax system minimizes economic distortions and administrative costs, while tax assessment pertains to determining the value of property for tax purposes. Tax base, on the other hand, refers to the total amount of taxable wealth in a jurisdiction. Consequently, tax effort is the only term that specifically captures the relationship between what could be collected and what is actually collected.