Which of the following moves by a government would most likely lead to the government taking on more investment risk?
A)Moving from a heavy dividend tax regime to a common progressive tax regime.
B)Moving from a common progressive tax regime to a heavy dividend tax regime.
C)Tax regimes cannot shift investment risk.
The correct answer was![B)]( "B)")
Moving from a common progressive tax regime to a heavy dividend tax regime.
Moving from a common progressive tax regime to a heavy dividend tax regime would increase the tax on dividends, which are taxed annually, and this would shift some of the investment risk to the government.
Please help to explain why the answer is correct. I did not understand the solution
@alta12, @AjFinance ,@vincentt,@sophie
A)Moving from a heavy dividend tax regime to a common progressive tax regime.
B)Moving from a common progressive tax regime to a heavy dividend tax regime.
C)Tax regimes cannot shift investment risk.
The correct answer was
Moving from a common progressive tax regime to a heavy dividend tax regime. Moving from a common progressive tax regime to a heavy dividend tax regime would increase the tax on dividends, which are taxed annually, and this would shift some of the investment risk to the government.
Please help to explain why the answer is correct. I did not understand the solution
@alta12, @AjFinance ,@vincentt,@sophie