The percent of each extra dollar of earned income that an income transfer recipient loses to higher taxes and lower government benefits is called the recipient's:

Question

Quizplus · Accepted Answer

The effective marginal tax rate refers to the percent of each extra dollar earned that a recipient loses to higher taxes and reduced benefits. This concept is important in understanding the disincentive effects of income transfers and the potential harm it can cause to recipients who may be discouraged from seeking additional income due to the high effective marginal tax rate. A, C, and D are incorrect as they do not describe the concept accurately.

The Percent of Each Extra Dollar of Earned Income That