Estoluania is considering replacing its progressive tax system with a flat tax that would raise equal revenue. How could this change encourage risk-taking behavior? How could it discourage risk-taking behavior?
Answer to relevant QuestionsA researcher found that when the capital gains tax rate declined, the average bequest size fell as well. How does the tax treatment of capital gains in the United States explain this relationship? You are a manager of a company that just spent $80,000 to purchase a piece of equipment that is expected to function for six years. If you can borrow money at 7%, what is the present discounted value of the depreciation ...Consider the psychological effects of dividend signaling. Which would seem a stronger signal of corporate health (or its absence): when a long-standing dividend payer stops paying dividends or when a firm that had not ...Why would reducing the number of tax brackets reduce the incentives for tax evasion? Suppose that the world is populated by people who are identical in every dimension except for their savings behavior. People live for two periods, earning $500 in the first period and nothing in the second period. The income ...
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