President Berry suggests changing the capital gains tax law so that taxes are assessed when the gains are accrued rather than when they are realized. What are the potential objections to this policy change? When you spend money on your children's consumption, this transfer is not taxed, but if you make a large direct gift to your children, it is taxed. Why does this represent a horizontal inequity inherent in transfer taxes? Can you think of any policy modifications that could reduce this inequity? Senator Crawford, arguing in favor of capital gains tax cuts, says that reducing capital gains tax rates will stimulate entrepreneurial activity. Senator Long, arguing against these tax cuts, suggests that they will encourage people to engage in riskier behavior and inefficient investment. Evaluate both senators arguments. Estoluania is considering replacing its progressive tax system with a flat tax that would raise equal revenue. How could this change encourage risk-taking behavior? How could it discourage risk-taking behavior