Interest income tends to increase with the total income of persons.This means that upper-income groups are likely to receive higher amounts of interest income as a percent of their income than lower-income groups.This implies that a flat-rate tax on interest income will take more dollars per year from the rich than from the poor.Do you agree with this argument? Indicate the market condi?tions that would have to prevail to prevent the shifting of a tax on interest income to groups other than those who earn interest.What will be the incidence of the tax if those conditions do not prevail?

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The Answer of Interest income tends to increase with the total income of persons.This means that upper-income groups are likely to receive higher amounts of interest income as a percent of their income than lower-income groups.This implies that a flat-rate tax on interest income will take more dollars per year from the rich than from the poor.Do you agree with this argument? Indicate the market condi?tions that would have to prevail to prevent the shifting of a tax on interest income to groups other than those who earn interest.What will be the incidence of the tax if those conditions do not prevail?

Interest Income Tends to Increase with the Total Income of Persons.This