Why should the tax laws be reformed to encourage saving?
A) because saving is a key determinant of long-run prosperity
B) because taxes on capital gains are too low
C) because higher-income households are taxed too much
D) because economic theory clearly predicts that a higher rate of return encourages saving

Question

Quizplus · Accepted Answer

Saving is a key determinant of long-run prosperity, as it provides the funds necessary for investment and economic growth. By reforming tax laws to encourage saving, individuals and businesses may be more likely to save their money instead of spending it, which ultimately leads to greater economic stability and prosperity in the long-run.

Why Should the Tax Laws Be Reformed to Encourage Saving