If the marginal tax rate is too high,it can cause all of the following except

Question

Quizplus · Accepted Answer

A high marginal tax rate typically discourages businesses from producing more, as it reduces their after-tax profits. Therefore, option A is incorrect. However, a high marginal tax rate can lead to a decline in government tax receipts, as it may encourage tax evasion and discourage economic activity. It can also lead to a decline in the rate of saving, as individuals have less disposable income available for saving.

If the Marginal Tax Rate Is Too High,it Can Cause