High marginal tax rates:
A)are used to encourage saving behaviour
B)distort incentives to work
C)will invariably lead to lower average tax rates
D)are not associated with deadweight losses

Question

Quizplus · Accepted Answer

High marginal tax rates can create disincentives for individuals to work and earn more income, as any additional income earned will be subject to a significantly higher tax rate. This can lead to less productivity and discourage economic growth.

High Marginal Tax Rates