Compared to taxes on labor income,taxes on capital income generate ________ deadweight loss and are paid by people who generally have the ________ ability to pay.

Question

Quizplus · Accepted Answer

Taxes on capital income generate a larger deadweight loss because they discourage investment and saving. They are also paid by people who generally have the most ability to pay, as capital income is typically earned by those with higher incomes.

Compared to Taxes on Labor Income,taxes on Capital Income Generate