The double taxation of saving creates a bias towards _____.

Question

Quizplus · Accepted Answer

The double taxation of saving refers to the situation where income is taxed when earned and then savings are taxed again when they earn interest. This creates a disincentive to save, as individuals are taxed twice on the same income if they choose to save rather than spend it immediately. Therefore, this situation creates a bias towards consumption, as people are more likely to spend their income rather than save it and face double taxation.

The Double Taxation of Saving Creates a Bias Towards _____