Which of the following is not an economic distortion created by the double tax on dividends?
A) An incentive to invest in noncorporate rather than corporate businesses.
B) An incentive for corporations to finance operations with debt rather than equity.
C) An incentive to invest domestically rather than internationally.
D) An incentive for corporations to retain earnings and structure distributions to avoid dividend treatment.
E) All of the above represent economic distortions created by the double tax on dividends.

Question

Quizplus · Accepted Answer

The double tax on dividends does not create an incentive to invest domestically rather than internationally. All other options represent economic distortions created by the double tax on dividends.

Which of the Following Is Not an Economic Distortion Created