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Congress would like to increase tax revenues by 20 percent. Assume that the average taxpayer in the United States earns $55,000 and pays an average

Congress would like to increase tax revenues by 20 percent.

Assume

that the average taxpayer in the United States earns $55,000 and pays an average tax rate of

30 percent.

If the income effect is in effect for all taxpayers, what average tax rate will result

in a 20 percent increase in tax revenues?

This is an example of what type of forecasting?

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