Suppose that federal marginal personal income tax rates will rise significantly over the next ten years. Explain

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Suppose that federal marginal personal income tax rates will rise significantly over the next ten years. Explain the ways in which individuals at all levels of income can react over time, not just immediately after taxes are raised. How will the size of the response differ, say, a year after the rise in tax rates compared to a week after the increase? Is it possible that some people will actually change their behavior before the higher tax rates go into effect? Explain.

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The Economics of Public Issues

ISBN: 978-0134018973

19th edition

Authors: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North

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