When measured over a long span of time, a tax on interest income
A)removes all benefits from saving.
B)reduces the benefits from saving by a small amount.
C)reduces the benefits from saving by a large amount.
D)does nor reduce any of the benefits from saving.

Question

Quizplus · Accepted Answer

A tax on interest income reduces the benefits from saving by a large amount over a long span of time because it decreases the effective return on savings, compounding the impact over time and significantly affecting the total accumulation of wealth.

When Measured Over a Long Span of Time, a Tax