Asked by Andrés Tomas on Jun 16, 2024
Verified
The U.S. income tax
A) discourages saving.
B) encourages saving.
C) has no effect on saving.
D) will reduce the administrative burden of taxation.
U.S. Income Tax
A tax imposed by the U.S. government on the income earned by individuals, corporations, trusts, and other legal entities.
Saving
The process of setting aside a portion of current income for future use or for investment purposes.
- Analyze how taxation influences patterns of saving and spending.
Verified Answer
NS
Nicholas ShammaJun 21, 2024
Final Answer :
A
Explanation :
The U.S. income tax discourages saving because it taxes the interest income that results from saving, thereby reducing the after-tax return on savings.
Learning Objectives
- Analyze how taxation influences patterns of saving and spending.