9. Income redistribution programs retard the growth of real outpnt since they increase both the explicit tax rate of the taxpayer-producer and the implicit tax rate of the transfer recipient. At the higher marginal tax rates, both the donor and the recipient have an incentive to substitute leisure (which is now cheaper) for work effort (which now yields a smaller payoff). Loss of output and economic inefficiency result. It is estimated that transferring additional income beyond the current levels would cost society about

$0.45 in lost output per dollar transferred, and the taxpayer about $ 1 . 58 per dollar transferred. Whether more transfers would be worth the cost is a question that cannot be answered by positive economic analysis.