Question
The finance minister of Beamland announces that the corporate tax rate will increase from 35% to 40% in order to finance the country's budget deficits.
The finance minister of Beamland announces that the corporate tax rate will increase from 35% to 40% in order to finance the country's budget deficits. As a counterbalance, she simultaneously announces the decrease in the dividend income tax from 10% to 5%, claiming that the change will have no effect on domestic investors. Do you agree with her statement? Explain.
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The finance ministers statement may not fully capture the potential impact on domestic investors as ...
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Macroeconomics
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
6th Canadian Edition
321675606, 978-0321675606
