What is likely to occur when the government implements programs such as progressive income tax rates?
A) Equity and efficiency are increased.
B) Equity is increased and efficiency is decreased.
C) Equity is decreased, and efficiency is increased.
D) Equity is decreased, and efficiency is decreased.

Question

Quizplus · Accepted Answer

Progressive income tax rates are designed to increase equity by requiring individuals with higher incomes to pay a higher percentage of their income in taxes than those with lower incomes. However, this may also decrease efficiency by discouraging productivity and investment from those who are subject to higher tax rates. Therefore, while equity increases, efficiency may decrease.

What Is Likely to Occur When the Government Implements Programs