Question: The tax system has a 50 tax rate on gains

The tax system has a 50% tax rate on gains from risky investments, and also allows a deduction at a 50% rate of any losses from risky investments. Which tax policy would increase risk taking more: (a) allowing those deductions on any losses, or (b) limiting the deduction only to losses that offset other gains (no loss offset)?

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  • CreatedApril 25, 2015
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