One argument advanced in favor of reducing the tax on dividends is that
A) dividends increase the wealth of shareholder's which contribute to increases in GDP.
B) reducing the tax on dividends will improve economic efficiency.
C) dividends accrue mostly to middle-income and low-income investors who are already paying heavy income taxes.
D) the reduction will encourage corporations to plow back retained earning into capital investments.

Question

Quizplus · Accepted Answer

Reducing the tax on dividends is argued to improve economic efficiency by reducing the double taxation on corporate earnings, potentially leading to more investment and economic growth.

One Argument Advanced in Favor of Reducing the Tax on Dividends