Part of the deadweight loss from taxing labour earnings is that people will:
A) work less
B) be reluctant to hire accountants to file their tax returns
C) low tax liabilities will universally be worse off than under some other tax policy
D) work more

Question

Quizplus · Accepted Answer

When taxes are imposed on labour earnings, individuals tend to work fewer hours or even opt out of the workforce altogether as the net wage they receive after taxes is reduced. This results in a decline in total production and economic efficiency, causing a deadweight loss. Therefore, option A is the correct answer.

Part of the Deadweight Loss from Taxing Labour Earnings Is