Asked by Lourie Peters on Apr 26, 2024
Verified
When the government levies a tax on a corporation,
A) all the burden of the tax ultimately falls on the corporation's owners.
B) the corporation is more like a tax collector than a taxpayer.
C) output must increase to compensate for reduced profits.
D) less deadweight loss will occur since corporations are entities and not people who respond to incentives.
Deadweight Loss
The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable. This can happen due to factors like market inefficiencies, taxes, or subsidies.
Corporation's Owners
Individuals or entities that hold shares of stock in a corporation, giving them ownership rights and interest in the company's profitability and governance.
Tax Collector
An official or entity responsible for collecting taxes on behalf of a government.
- Analyze the implications of using specific taxes for public finance.
- Examine the effects of corporate income tax on stakeholders such as employees and consumers.
Verified Answer
JR
Joshua RodriguezMay 01, 2024
Final Answer :
B
Explanation :
The corporation acts more like a tax collector than a taxpayer because the burden of the tax can be passed on to others, such as consumers through higher prices, employees through lower wages, or shareholders through lower profits.
Learning Objectives
- Analyze the implications of using specific taxes for public finance.
- Examine the effects of corporate income tax on stakeholders such as employees and consumers.