In 1986 Congress drastically cut the marginal tax rate on upper income levels from 50% to 28%.Empirical evidence analyzing the labor supply effects of the tax cut found that women in the high income tax bracket
A) did not respond in any significant way to the tax cut, as their high level of income ensured that they were already content with their labor supply choices.
B) experienced offsetting substitution and income effects.
C) increased both labor force participation and hours of work significantly.
D) reduced their labor force participation and hours worked significantly because of a dominant income effect.
Correct Answer:
Verified
Q29: An increase in the wage rate when
Q30: A welfare program offers $4000 of benefits
Q31: A country has no welfare program.Then it
Q32: Mary earns $20 an hour and works
Q33: How does an increase in non-labor income
Q35: Many working mothers have to pay for
Q36: A professor declared "with the recent drop
Q37: The property tax goes up $4000 a
Q38: Indifference curves drawn with income and leisure
Q39: Empirical evidence on the Earned Income Tax
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents