The basic model of taxation and risk taking was developed by Domar and Musgrave in 1944; it reached the conclusion that:

Name: The basic model of taxation and risk taking was developed by Domar and Musgrave in 1944; it reached the conclusion that:
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The Domar and Musgrave model concluded that taxing the returns from risky assets will actually increase risk taking because investors seek to maintain their after-tax returns, leading them to take on more risk to compensate for the taxes paid on returns.

The Basic Model of Taxation and Risk Taking Was Developed