All other things held constant, lower marginal (income) tax rates a.necessarily increase tax...

Question:

All other things held constant, lower marginal (income) tax rates

a.necessarily increase tax revenues.

b.necessarily decrease tax revenues.

c.decrease the attractiveness of productive activities relative to leisure and tax- avoidance activities, and shift the SRAS curve rightward.

d.do not affect the attractiveness of productive activities relative to leisure and tax- avoidance activities and therefore the SRAS does not shift rightward or leftward.

e.increase the attractiveness of productive activities relative to leisure and tax- avoidance activities and shift the SRAS curve rightward

Marginal Tax Rates

The marginal tax rate is the rate of tax paid on the marginal (or last) dollar of income. The income tax system in the United States is progressive, which means that the percentage rate gets higher as income increases.

Answer and Explanation:

All other things held constant, lower marginal (income) tax rates

a.necessarily increase tax revenues.No, lower rates could result in lower...

See full answer below.

Become a Study.com member to unlock this answer! Create your account

View this answer

Learn more about this topic:

Loading...
What is a Marginal Tax Rate? - Definition & History

from Intro to Business: Help and Review

Chapter 24 / Lesson 8
6.4K

Related to this Question

Explore our homework questions and answers library