Suppose that you respond to an income tax increase by giving more money to charity (which is tax deductible).This is an example of:

Question

Quizplus · Accepted Answer

The income exclusion effect refers to the behavior of reducing taxable income through deductions (such as charitable donations) in response to an increase in income tax, effectively lowering the tax burden by excluding some income from taxation.

Suppose That You Respond to an Income Tax Increase by Giving