A reduction in the tax rate on interest income
A)would necessarily raise national saving.
B)would primarily benefit the wealthy.
C)both a and b are correct.
D)None of the above are correct.

Question

Quizplus · Accepted Answer

Lowering the tax rate on interest income would primarily benefit the wealthy as they typically have more interest-bearing investments. However, it is unclear if it would necessarily raise national saving as it depends on other factors such as individual and business spending and investment behavior.

A Reduction in the Tax Rate on Interest Income