Explain why many economists argue that an income tax penalizes savers but a consumption tax would not.

Question:

Explain why many economists argue that an income tax penalizes savers but a consumption tax would not. In what sense can consumption be regarded as a better index of the ability to pay taxes than income?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Public Finance A Contemporary Application Of Theory To Policy

ISBN: 9780538754460

10th Edition

Authors: David N Hyman

See More Books

Question Posted: Aug 15, 2023 02:30 PM

See More Questions

Many economists argue that a tax on apartment buildings is likely to reduce the supply of apartments, but that a tax on all land, including the land on which apartment buildings stand, will not...
Many economists argue that more research, development, and innovation occur in the oligopolistic market structure than in any other. Why might this conclusion be true?
Why do you suppose that many economists argue that unemployment would drop if people developed stronger critical-thinking, writing, and science and mathematics skills that can be applied to wider...
The need to be liked and to stay on good terms with most other people is the need for? a. Affiliation b. Power c. None of the above d. Achievement
Recently some people have complained that sports team mascots offend their cultural groups. Sports names such as the Nortre Dame "Fighting Irish", the Florida "Seminoles", the Cleveland "Indians",...
How does formulating a research design differ from developing an approach to a problem?
In reaction turbine, draft tube is used: (a) To transport water downstream without eddies (b) To convert the kinetic energy to pressure energy by a gradual expansion of the flow cross-section (c) For...
E&Y officials believed that the CBI audits were high-risk engagements. Under what general circumstances should an audit firm choose not to accept a high-risk engagement?
ACTUAL $ 750,000 Big Boats, Inc. makes laury speed boats for water sking Actual results and the static budge Sales commissions are computed at 5% of gross sales The expected ROI for this subsidiary...
Show how under an income tax the present value of the amount of tax paid over a persons lifetime will vary with the difference in saving for two individuals who begin the life cycle at age 18 and...
How could the current personal income tax be modified so that it becomes a consumption tax? What are the advantages of taxing consumption in this way?
Econetics Research Corporation, a well-known Montreal-based consulting firm, wants to test how it can influence the proportion of questionnaires returned from surveys. In the belief that the...
DFB, Inc., expects earnings at the end of this year of $4.46 per share, and it plans to pay a $2.74 dividend to shareholders (assume that is one year from now). DFB will retain $1.72 per share of its...
In the Global Financial Crisis box in Section 6.2, Bloomberg.com reported that the three-month Treasury bill sold for $100.002556 per $100 face value. What is the yield to maturity of this bond,...
Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of the new...
Alex Swanson is a pharmacist in a modern chain pharmacy located in a new strip mall in a trendy suburb of a major metropolitan area. Alex got a telephone call one day from a nearby community...
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $6.2 million on TV, radio, and print advertising this...
Which of the following are true? If false, explain briefly. a) A very low P-value provides evidence against the null hypothesis. b) A high P-value is strong evidence in favor of the null hypothesis....
What are some of the features of the Unified Process (UP)?
Consider the mean monthly return and the standard deviation for three industry sectors, as shown in Exhibit 2: Based on the coefficient of variation (CV), the riskiest sector is: A. utilities. B....
The target semideviation of the returns over the 10 years, if the target is 2 percent, is closest to: A. 1.42 percent. B. 1.50 percent. C. 2.01 percent. A fund had the following experience over the...
The funds standard deviation of returns over the 10 years is closest to: A. 2.40 percent. B. 2.53 percent. C. 7.58 percent. A fund had the following experience over the past 10 years: Year 1 2 3 4567...
Prepare a balance sheet as of December 31, 2020, for the Diablo Co., from the following information: Cash $14,580 Machinery and equipment 60,000 Inventory 24,000 Accounts receivable 97,500 Furniture...
2. (**) An immunized bond portfolio is that which, for a given fixed target date, gives the holder a fixed return no matter what happens to interest rates from the initial date and the future target...
a. Excel Courier (Gh.) Ltd. has an 8% bond making semi-annual payments. The bond has a face value of GH1,000 and has 13 years to maturity. Aseda Co. Ltd. has just issued a 10-year 10% coupon bond...

Explain why many economists argue that an income tax penalizes savers but a consumption tax would not.

Question:

Step by Step Answer:

Many economists argue that an income tax penalizes savers while a consumption tax does not due to the different treatment of saving and spending in ea...View the full answer

Public Finance A Contemporary Application Of Theory To Policy

Students also viewed these Business questions