The reduction in marginal tax rates will:

Question

Quizplus · Accepted Answer

A reduction in marginal tax rates means people keep a higher percentage of their income, which reduces the incentive for tax preferences (such as deductions and credits) to reduce their tax burden. This, in turn, reduces the excess burden of tax preferences, which is the societal cost of the distorted behavior that these preferences encourage. This reduction in excess burden, however, does not necessarily change the level of tax expenditures, which are government spending programs that take the form of tax breaks.

The Reduction in Marginal Tax Rates Will