Which of the Following Is Not a Reason That Tax

question 49

Multiple Choice

Which of the following is not a reason that tax revenue might fall at very high tax rates?

• A)People have a greater incentive to practice tax avoidance.
• B)Government officials fail to enforce tax laws.
• C)People tend to commit more tax evasion.
• D)People work less in the case of a personal income tax.
• E)Corporations inflate expenses in the case of a corporate income tax.

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Definitions:

Articles of Incorporation

A document filed with a state government to legally document the creation of a corporation.

Corporation

A legal entity that is separate and distinct from its owners, which can enter into contracts, own assets, sue and be sued.

Piercing the Corporate Veil

A legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors.