The US tax policy encourage long-term investments: OD. by providing a lower tax rate for long-term gains.
What is long-term investments?
Because long-term gains are subject to a lower tax rate in the US, tax policy therein supports long-term investments. Investing in securities such as stocks, bonds, or real estate might result in a profit upon sale. We refer to this profit as a capital gain. Assets kept for less than a year are classified as short-term gains under the US tax code whereas assets held for more than a year are classified as long-term gains.
The US tax code offers a lower tax rate on long-term gains than on short-term gains in order to incentivize long-term investments. This implies that you can qualify for a lower tax rate on your gains if you keep onto your investments for a longer period of time than a year before selling them.
Therefore the correct option is D.