A decrease in marginal tax rates will ________ after-tax profits and ________ more investment.

Question

Quizplus · Accepted Answer

A decrease in marginal tax rates means that businesses will be able to keep a greater portion of their profits after taxes. This will encourage them to invest more because they will have more funds available to do so. Therefore, decrease in marginal tax rates will increase after-tax profits and encourage more investment.

A Decrease in Marginal Tax Rates Will ________ After-Tax Profits