Why are income taxes on capital income more powerful than those on labor income?
What will be an ideal response?
Given positive inflation, what appears to be a moderate tax on interest income dramatically decreases the real after-tax interest rate, which is the interest rate that influences investment and saving plans. In particular, by driving a wedge between the real interest rate savers receive and firms pay, the tax on interest income decreases the supply of loanable funds, which lowers investment and saving in the economy.
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An extra dollar into the Social Security trust fund _____
a. increases the assets of the federal government by a dollar b. decreases the assets of the federal government by a dollar c. has no impact on the assets of the federal government d. speeds up the time until insolvency of the trust fund
A monopolist's demand curve is
A) perfectly elastic. B) perfectly inelastic. C) of unit elasticity throughout. D) the industry demand curve.