The Laffer curve illustrates the concept that a. an increase in marginal tax rates will always cause tax revenues to decrease. b. when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase. c. when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline. d. an increase in marginal tax rates will always cause tax revenues to increase.
The Laffer curve illustrates the concept that a. an increase in marginal tax rates will always cause tax revenues to decrease. b. when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase. c. when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline. d. an increase in marginal tax rates will always cause tax revenues to increase.
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
Problem 2DQ
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Question
The Laffer curve illustrates the concept that
a.
an increase in marginal tax rates will always cause tax revenues to decrease.
b.
when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase.
c.
when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline.
d.
an increase in marginal tax rates will always cause tax revenues to increase.
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