Asked by Katherine Roman on May 04, 2024
Verified
The marginal tax rate serves as a measure of the extent to which the tax system discourages people from working.
Marginal Tax Rate
The rate at which the last dollar of a taxpayer's income is taxed, indicating the impact of the next dollar earned on their tax burden.
- Familiarize oneself with the concept and outcomes of deadweight loss in tax policies.
Verified Answer
MS
Mary Salve DolorMay 09, 2024
Final Answer :
True
Explanation :
The marginal tax rate, which is the rate on the next dollar of income earned, can affect individuals' incentives to work more hours or pursue additional income, as higher marginal rates reduce the after-tax return on earning more income, potentially discouraging additional work.
Learning Objectives
- Familiarize oneself with the concept and outcomes of deadweight loss in tax policies.