Which of the following statements concerning higher marginal tax rates is correct?

Question

Quizplus · Accepted Answer

Higher marginal tax rates discourage work effort because individuals have less incentive to work or earn additional income when they know they will be taxed at a higher rate. This can lead to a decrease in labor supply and overall economic activity. Additionally, higher tax rates may make fewer people eligible for welfare benefits because their income may disqualify them from receiving assistance.

Which of the Following Statements Concerning Higher Marginal Tax Rates