Asked by Emalea Felders on Jul 16, 2024
Verified
The ultimate burden of the corporate profits tax appears to depend on all of the following except
A) the relative capital/labor intensity of the corporate and noncorporate sectors.
B) the ease with which capital and labor can be substituted in the corporate and noncorporate sectors.
C) the elasticities of demand for the products produced in the corporate and noncorporate sectors.
D) the tax rate structure of the corporate profits tax.
Capital/Labor Intensity
A measure of the ratio of capital to labor in the production process, indicating whether an economy or sector relies more on capital investment or labor.
Corporate Profits Tax
A tax imposed by governments on the income earned by companies and corporations.
- Assess the long-term outcomes of assorted taxes, encompassing the tax on company earnings.
Verified Answer
RV
Randhawa VijayJul 22, 2024
Final Answer :
D
Explanation :
The ultimate burden of the corporate profits tax depends on factors that affect how the tax can be shifted or absorbed, such as the relative capital/labor intensity, the substitutability of capital and labor, and the elasticities of demand for products. The tax rate structure of the corporate profits tax itself does not determine the burden's distribution but rather the amount of tax collected.
Learning Objectives
- Assess the long-term outcomes of assorted taxes, encompassing the tax on company earnings.