If the corporate income tax induces businesses toreduce their capital investment, thena. the tax does not have any deadweightloss.b. corporate shareholders benefit fromthe tax.c. workers bear some of the burden ofthe tax.d. the tax achieves the goal of verticalequity
If the corporate income tax induces businesses toreduce their capital investment, thena. the tax does not have any deadweightloss.b. corporate shareholders benefit fromthe tax.c. workers bear some of the burden ofthe tax.d. the tax achieves the goal of verticalequity
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
If the corporate income tax induces businesses to
reduce their capital investment, then
a. the tax does not have any deadweight
loss.
b. corporate shareholders benefit from
the tax.
c. workers bear some of the burden of
the tax.
d. the tax achieves the goal of vertical
equity
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