Which of the following is not an example of a tax causing an economic dislocation?
A) A high income individual chooses to invest in tax free municipal bonds over corporate bonds which have a higher advertised rate.
B) A car dealership holds a gigantic sale to reduce its inventory before property taxes are assessed
C) High income individuals pay a greater amount of taxes than do low income people, but high income individuals are not guaranteed more public services.
D) None of the above-all are examples of dislocation.

Question

Quizplus · Accepted Answer

While C does point out a discrepancy in taxation and public services for high versus low income individuals, it does not necessarily cause an economic dislocation. A and B both involve people making choices or taking actions specifically because of tax implications, which can create economic dislocations.

Which of the Following Is Not an Example of a Tax