Some economists have advocated reducing the taxation of interest and other capital income,arguing that such a policy change would raise the after-tax interest rate that savers can earn and would thereby encourage people to save more.

Question

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This is a commonly held view among some economists who believe that lowering taxes on interest and other capital income can incentivize people to save more by increasing the after-tax returns on such investments.

Some Economists Have Advocated Reducing the Taxation of Interest and Other