(I) High implicit marginal tax rates reduce the incentive of the poor to earn. (II) The Samaritan's dilemma is that transfer programs lower the opportunity cost of activities that lead to poverty.

Question

Quizplus · Accepted Answer

High implicit marginal tax rates can discourage the poor from earning more as they lose benefits, and the Samaritan's dilemma suggests that aid can reduce the incentive to avoid poverty-inducing activities.

(I) High Implicit Marginal Tax Rates Reduce the Incentive of the Poor