Changes in the tax treatment of capital returns can result in a change in the amount of capital employed in the production process.

Question

Quizplus · Accepted Answer

If the tax treatment of capital returns changes, it can affect the incentives for investors to hold or invest in capital. This can lead to a change in the amount of capital employed in the production process, which can ultimately affect the economy's productivity and growth.

Changes in the Tax Treatment of Capital Returns Can Result