Which of the following statements concerning the federal corporate income tax is true?
A)It is an efficient tax because it imposes a small excess burden relative to the tax revenue it raises.
B)The incidence of the corporate income tax can be determined by using demand and supply analysis.
C)Determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax.
D)The corporate income tax is an example of the benefits-received principle.

Question

Quizplus · Accepted Answer

The statement is true that determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax. This is because corporations can respond to the tax in various ways, such as by raising prices, reducing wages, or reducing dividends, and it is not certain which of these responses they will choose. Therefore, determining the incidence of the tax is complex.

Which of the Following Statements Concerning the Federal Corporate Income