Question

How might a double tax agreement between the U.S. and Taiwan impact economic relations and growth?

A) It would hinder investment and economic growth in both countries.
B) It would have no effect on investment or economic growth.
C) It would likely discourage investment but boost economic growth.
D) It would likely encourage greater investment, ultimately boosting economic growth and job creation.
E) It would only benefit one country while negatively impacting the other.

Answer 1

A double tax agreement between the U.S. and Taiwan is likely to encourage investment, stimulate economic growth, and create jobs by preventing double taxation and providing tax stability for businesses operating across borders.

Step-by-step explanation:

A double tax agreement (DTA) between the U.S. and Taiwan would primarily be designed to prevent double taxation of income earned in one country by a resident of the other country. Such agreements typically provide clarity over tax duties, thereby reducing tax burdens on companies and investors operating across borders. As a result, a DTA between the U.S. and Taiwan would likely encourage greater investment and facilitate economic interactions by providing stability and certainty for businesses. This increased investment can lead to economic growth and job creation in both countries as businesses expand and trade increases.