Which factor makes up part of the deadweight loss from taxing labour earnings
A)People will work more.
B)People will be reluctant to hire accountants to file their tax returns.
C)People with low tax liabilities will universally be worse off than under some other tax policy.
D)People will work less.

Question

Quizplus · Accepted Answer

Deadweight loss from taxing labour earnings occurs when people work less due to the tax. When workers are taxed on their earnings, they may no longer find it worth the effort to continue working or may choose to work fewer hours, which results in a decline in output and causes deadweight loss. This is the main factor that contributes to the deadweight loss from taxing labour earnings.

Which Factor Makes Up Part of the Deadweight Loss from Taxing