Of the following, the most likely effect of an increase in income tax rates would be to: decrease the savings rate? decrease the supply of loanable funds? increase interest rates ? all of the choices are correct

Of the following, the most likely effect of an increase in income tax rates would be to: decrease the savings rate? decrease the supply of loanable funds? increase interest rates ? all of the choices are correct

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 5DQ

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Concept explainers

Taxes and Financial Planning

Financial planning is the process of achieving one's financial goals and objectives in a step-by-step manner. Financial planning aids in the management of one's income, expenses, assets, and investments. It generates enough liquidity to cover short-term financial needs. Tax planning is one of the most important aspects of financial planning because it contributes to higher returns while lowering tax liability. Tax planning ensures financial growth for investors and assesses their financial situation from a tax standpoint.

Question

Of the following, the most likely effect of an increase in income tax rates would be to:

decrease the savings rate?

decrease the supply of loanable funds?

increase interest rates ?

all of the choices are correct

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