The idea that an increase in a tax rate generates a reduction in the tax base that makes the net effect of the tax rate increase potentially ambiguous is called the:

Question

Quizplus · Accepted Answer

The dynamic view of taxation acknowledges that taxpayers may change their behavior in response to changes in tax rates, such as working less or finding ways to minimize taxable income, which can affect the overall tax base and make the net effect of a tax rate increase uncertain.

The Idea That an Increase in a Tax Rate Generates