A politician proposes to increase the income tax on top earners.He claims this will increase private sector economic output.This claim

Question

Quizplus · Accepted Answer

The claim that increasing income tax on top earners will increase private sector economic output does not make sense because income and output are interconnected, and taxing one effectively taxes the other. In simple terms, when taxes are increased, it leaves individuals with less disposable income, resulting in a decline in consumption, which then leads to a decrease in production and economic output.

A Politician Proposes to Increase the Income Tax on Top