Sam is subject to a 40 percent tax on income, and her after-tax income is $ 90,000,

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Sam is subject to a 40 percent tax on income, and her after-tax income is $ 90,000, as in Figure. Now sup-pose the government permits her to deduct her contributions (to Oscar) from her income before the 40 percent tax rate is applied. How will this deduction affect her budget line?
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Microeconomics Theory and Applications

ISBN: 978-1118758878

12th edition

Authors: Edgar K. Browning, Mark A. Zupan

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