U.S.public policy discourages saving because
A)other things the same,taxes increase the return from savings.
B)means tested programs such as Medicaid provide lower benefits to those who did not save.
C)none of parents' bequest to their children is taxed.
D)some forms of capital income are taxed twice.

Question

Quizplus · Accepted Answer

Some forms of capital income, such as dividends and capital gains, are subject to double taxation. This discourages saving and investment because it lowers the potential return from these investments. Additionally, means-tested programs like Medicaid often provide lower benefits to those who have saved, which also discourages saving. However, taxes on bequests and increased returns from savings (due to taxes) actually encourage saving, so choices A and C are incorrect.

U.S.public Policy Discourages Saving Because