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

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Design Of The Tax System

Section: Chapter Questions

Problem 6CQQ

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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

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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