Question

A government’s decision to implement a capital gains tax is a measure to:

• A. Discourage investment in the stock market.
• B. Generate revenue from the profits on the sale of assets.
• C. Reduce the national debt by directly paying off creditors.
• D. Fund social welfare programs by taxing overall income.

Answer 1

Answer:

B. Generate revenue from the profits on the sale of assets.

• A capital gains tax is a tax on the profit an investor makes from the sale of a capital asset, such as real estate, stocks, or bonds.