Dynamic Tax Analysis Generally Predicts

question 2

Multiple Choice

Dynamic tax analysis generally predicts

• A) that the higher the tax rate is, the higher the tax revenue will continue to be into the future.
• B) that the higher tax rates lead to higher revenues only to a point at which revenues will begin to decrease due to a diminishing tax base.
• C) that lower tax rates will always and continuously lead to increased tax revenues.
• D) that lower tax rates are always going to lead to decreased tax revenues.