When implicit marginal tax rates are excessively _____, the marginal benefit from working additional hours is:
A) high; high.
B) high; low.
C) low; low.
D) low; high.

Question

Quizplus · Accepted Answer

When implicit marginal tax rates are excessively high, the marginal benefit from working additional hours is low because a significant portion of the additional income earned is taken away through taxes, reducing the incentive to work more.

When Implicit Marginal Tax Rates Are Excessively _____, the Marginal