A study by the Congressional Budget Office (CBO) regarding the corporate income tax included the following statement: "A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but the money must come
from somewhere..." The comments that followed this statement argued that
A) corporations pass on some of the burden of the tax to investors in the company, to workers, and to consumers.
B) it is necessary to retain the tax because it is based on the ability-to-pay principle.
C) the corporate income tax is a reliable source of revenue because corporations cannot avoid paying the tax.
D) the tax is more progressive than the individual income tax.
A
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Suppose the cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda. B. drink a third glass of soda if the benefit of doing so is positive. C. not drink a third glass of soda. D. drink a third glass of soda if his benefit from drinking his second glass of soda was positive.
The above figure shows the domestic market for wheat. Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton. The quantity produced once the price support is in place is
A) 400 million tons. B) 300 million tons. C) 100 million tons. D) 250 million tons. E) 200 million tons.
The output produced by the single-price, unregulated monopoly in the above figure is
A) efficient because profit is maximized. B) inefficient because less than the efficient quantity is produced. C) efficient because marginal costs equals marginal revenue. D) inefficient because more than the efficient quantity is produced.
The total of consumer plus producer surplus is largest at the market equilibrium.
Answer the following statement true (T) or false (F)