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Asked by Shakia Balmer on Apr 28, 2024

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A tax policy wherein the individual tax rate on dividends is greater than the tax rate on capital gains supports a low-dividend policy.

Tax Policy

The laws and regulations governing how taxes are collected and managed by the government, influencing economic behavior and distribution of resources.

Individual Tax Rate

The tax rate applied to an individual's income, which varies depending on income level and filing status, contributing to the progressive taxation system.

Capital Gains

Capital gains are the profit made from the sale of an asset or investment which has increased in value over the holding period.

  • Understand the influence of corporate and tax policies on dividend decisions.
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carissa craigApr 29, 2024
Final Answer :
True
Explanation :
A tax policy where dividends are taxed at a higher rate than capital gains incentivizes companies to retain earnings (leading to capital gains) rather than distribute them as dividends, supporting a low-dividend policy.

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