If the tax base is narrowed through an increase in exemptions,______ in order to raise the same level of revenue.

Question

Quizplus · Accepted Answer

If the tax base is narrowed through an increase in exemptions, the government will have to raise tax rates in order to generate the same level of revenue. This is because there will be fewer taxpayers paying taxes, so the rates would have to be increased on the remaining taxpayers to make up the difference.

If the Tax Base Is Narrowed Through an Increase in Exemptions,______