A flat tax is a tax on income at the same rate for everyone regardless of how

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A flat tax is a tax on income at the same rate for everyone regardless of how much income they earn. Estonia reduced its rate of flat tax from \(21 \%\) in 2014 to \(20 \%\) in 2015 . What effect can such a tax rate reduction be expected to have on hours worked and tax revenues? Explain your answer in terms of income, substitution, and total effects.

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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