Which statement about capital gains taxes is true?

A. they increase the general price of services

B. they make the consumption of certain goods more expensive

C. they reduce the profit that can be made from an investment

D. they make home ownership more expensive

C.

Explanation:

Capital Gain Taxes are the taxes paid by people on the capital gain. Capital gain can be defined as a rise in the value of an investment than the purchase value. In simple terms, when a price of a capital asset increases in the market than the price used for the purchase, the investor has to pay the capital gain taxes.

From the given options, the correct statement for the capital gain taxes is option C. It reduces the profit earning from the investments. The investor has to pay the tax according to the tax bracket which varies from 0%, 15% or 20%.

So, the correct answer is option C.