Dynamic tax analysis assumes

Question

Quizplus · Accepted Answer

Dynamic tax analysis assumes that changes in tax rates will have an effect on the tax base, i.e. altering the behavior of taxpayers and potentially changing the amount of tax revenue collected. Therefore, option D is the correct answer. Options A and B are incorrect because dynamic tax analysis does not assume that tax rates will remain the same for any specific length of time, and it does take into account how changes in tax rates impact the tax base. Option C is also incorrect because  dynamic tax analysis assumes that changes in tax rates will impact tax revenue.

Dynamic Tax Analysis Assumes