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A. Is it possible for the marginal tax rate (MTR) to be decreasing in income while the average tax rate (ATR) is increasing in income?

A. Is it possible for the marginal tax rate (MTR) to be decreasing in income while the average tax rate (ATR) is increasing in income? Explain.

B. In the Mirrlees model of optimal income taxation, what should be the MTR of the highest earner in an economy? Explain.

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