One Argument Against Using Taxation to Pay Off the Public

question 128

True/False

One argument against using taxation to pay off the public debt is that it will redistribute wealth from richer bondholders to poorer people who do not own bonds.

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Definitions:

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall market capitalization remains the same.

Pre-split Price

Refers to the stock price of a company before it undergoes a stock split, a process that increases the number of shares while reducing the price per share without affecting the company's overall market capitalization.

Post-split Price

The value of an individual share after a company has completed a stock split.