Which of the following is not an argument in favor of reforming the tax laws to encourage saving?
A)Saving is a key determinant of long-run prosperity.
B)Current tax laws discourage saving for the purpose of leaving a large bequest.
C)The substitution effect of a higher return to saving may be about equal to the income effect of a higher return to saving.
D)The tax code currently taxes some forms of capital income twice.

Question

Quizplus · Accepted Answer

The substitution effect and income effect argument is not directly in favor of reforming tax laws to encourage saving, as it suggests that changes in returns to saving might not significantly alter saving behavior.

Which of the Following Is Not an Argument in Favor