A rise in marginal income tax rates would likely increase the size of the underground economy.

Name: A rise in marginal income tax rates would likely increase the size of the underground economy.
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Question

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Higher marginal tax rates can create a greater incentive for individuals and businesses to avoid paying taxes by engaging in underground economic activities, such as undeclared work or unreported sales. This can result in an increase in the size of the underground economy.

A Rise in Marginal Income Tax Rates Would Likely Increase