Economist Dr. Kevin Lee argues that increasing the capital gains tax would not significantly reduce investment, contrary to conventional economic theory.
9
readingWhich economic analysis would best support Lee's unconventional position?
A
Wealthy investors often hold assets long-term
B
Tax policy debates are contentious
C
Countries are different economically
D
Historical data shows countries that raised capital gains taxes saw no significant decrease in investment levels, while those that cut rates saw no investment surge
Correct Answer: D
Choice D is the best answer. Both directions (increase and cut) showing no effect challenges the theoretical link.
💡 Strategy: Claims challenging theory need evidence that contradicts the predicted relationship.