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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

Give three examples of how our society discourages saving. What are the drawbacks of eliminating these disincentives?

To determine

Tax reforms discouraging savings.

Explanation

Our society discourages saving in the form of tax system in the following ways:

  1. (1) Tax system discourages saving by taxing the return to saving quite heavily.
  2. (2) Tax code further discourages the savings by taxing some forms of capital income twice.
  3. (3) Tax laws discourage the most direct way in which one generation can help the next generation by taxing bequests...

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