In 2007, Germany increased the value added tax (VAT) on consumption from 16 percent to 19 percent. According to the supply- side view,

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According to the supply-side view, an increase in consumption tax (VAT) leads to a decrease in after-tax wage rate. This is because firms would have to pay more for the goods and services they use, leading to higher production costs. To offset these costs, firms may reduce wages or increase prices charged to consumers. As a result, the after-tax wage rate falls, reducing the incentive to work. This is consistent with the supply-side view that higher taxes reduce work incentives and labor supply. Therefore, the correct answer is B.

In 2007, Germany Increased the Value Added Tax (VAT) on Consumption