Income taxes create a wedge between the wage rate paid by ________ and received by workers and thereby ________ employment and ________ potential GDP.

Name: Income taxes create a wedge between the wage rate paid by ________ and received by workers and thereby ________ employment and ________ potential GDP.
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Question

Quizplus · Accepted Answer

Income taxes reduce the effective wage received by workers, which can decrease their incentive to work, thereby lowering employment and potential GDP.

Income Taxes Create a Wedge Between the Wage Rate Paid