Reducing corporate tax rates is often considered as a policy tool to enhance investment. How could the presence of tax loopholes diminish the relationship between corporate tax rates and corporate investment?
Answer to relevant QuestionsConsider the four basic questions of public finance listed in the chapter. Which of these questions are positive—questions that can be proved or disproved—and which are normative—questions of opinion? Explain your ...The price of a bus trip is $1 and the price of a gallon of gas (at the time of this writing!)is $3. What is the relative price of a gallon of gas, in terms of bus trips? What happens when the price of a bus trip falls to ...Why would reducing the number of tax brackets reduce the incentives for tax evasion? Tax evasion is particularly common for workers in professions like waiting tables and bartending, where tips make up a substantial fraction of compensation. Use economic theory to explain why this is the case. While proponents of tax simplification argue that a flat tax would be fairer, in other dimensions a flat tax reduces fairness in the tax system. Why is this so?
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