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Assume a fully integrated imputation system, where gamma is one. The Government decides to reduce the corporate tax rate form 30% to 20%. Which of

Assume a fully integrated imputation system, where gamma is one. The Government decides to reduce the corporate tax rate form 30% to 20%. Which of the following statements is correct?

The amount of overall tax collected by the Government (company plus personal) would fall by 10%.

The amount of overall tax collected by the Government (company plus personal) would be left unchanged.

The amount of overall tax collected by the Government (company plus personal) would increase because those shareholders on the top marginal rate would be required to pay more on their personal account.

None of the other answers is correct.

The amount of overall tax collected by the Government (company plus personal) would fall because shareholders are dominated by institutions, such as superannuation funds which have a tax rate lower than the company tax rate.

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