Changing the Basis of Taxation from Income Earned to Amount

question 60

Multiple Choice

Changing the basis of taxation from income earned to amount spent will

• A)necessarily reduce tax revenues.
• B)lower effective interest rates on savings.
• C)distort incentives to earn income.
• D)eliminate disincentives to save.

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Definitions:

Promise

An assurance given by one party to another agreeing to do or not do something in the future.

Insolvent

Refers to the condition of an individual or entity that cannot pay its debts when they are due.

Serve Process

The procedure by which a party to a lawsuit gives an appropriate notice of initial legal action to another party (defendant or respondent) in order to exercise jurisdiction over that person.

Admission

The process of being accepted into an organization or institution, or the acknowledgment of a fact or truth.