One consequence of raising tax rates is that it
A)provides an added incentive to work
B)provides less incentive to participate in the underground economy
C)always increases total tax revenues
D)leads to less underreporting of income
E)leads to more underreporting of income

Question

Quizplus · Accepted Answer

Raising tax rates can lead to more underreporting of income as individuals and businesses may attempt to evade higher taxes by not fully disclosing their earnings.

One Consequence of Raising Tax Rates Is That It