In 2018, two members of Congress introduced the Stop Bad Employers by Zeroing Out Subsidies Act, which would tax firms whose employees receive government assistance. These members of Congress thought this legislation would give firms a reason to raise employee wages so fewer employees would receive the government assistance. Economists at the Center on Budget and Policy Studies believed that the implementation of this legislation would
A) result in most employers raising employee wages substantially.
B) result in many employers likely seeking to reduce the number of low-wage workers they employ.
C) actually reduce the wages of all workers.
D) have little to no impact on the number of low-wage workers being employed.

Question

Quizplus · Accepted Answer

Economists believed that instead of raising wages, employers might reduce the number of low-wage workers to avoid the tax, impacting employment levels for low-wage workers.

In 2018, Two Members of Congress Introduced the Stop Bad