During the 2008 presidential campaign, Senator Obama proposed eliminating the income tax for all seniors earning less
Question:
During the 2008 presidential campaign, Senator Obama proposed eliminating the income tax for all seniors earning less than $50,000.
Seniors making above this threshold would still be subject to the income tax, which could potentially mean a tax liability of thousands of dollars. Sketch a budget constraint in a leisure-income diagram that is consistent with this proposal. If this proposal were adopted, what would happen to the labor supply for seniors?
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