If corporations maximize profit, a corporate income tax:

Question

Quizplus · Accepted Answer

A corporate income tax has no immediate effect on the profit-maximizing output of a corporation in the short run. The corporation will continue to produce the same level of output as before the tax was imposed. However, in the long run, the corporate income tax may reduce the incentives for corporations to invest and expand, which could ultimately lead to a reduction in output and profits.

If Corporations Maximize Profit, a Corporate Income Tax