A new administration reforms a state’s tax code. Corporate tax was increased by 3%, allowing the value-added tax on consumer goods to be reduced by 5%. This had no net effect on the state budget as the two tax changes balanced each other out.
Use the passage to answer the question.
What is a likely effect of this change in tax policy?
A.
High-income people will choose to leave the state.
B.
Nonprofits will become a larger part of the economy.
C.
Consumers in the state will choose to buy fewer things.
D.
Financial institutions will be less likely to invest in the state’s companies.
1 answer
C. Consumers in the state will choose to buy fewer things.
1 answer