Crazy Eddie is the world's worst politician. At a recent political rally he told the crowd, "This country was founded on hard work. If elected, I plan to encourage that work by raising income taxes."

Is it possible that Crazy Eddie is rightthatincreasingincome taxes could cause people to work more?

No. A higher income tax can only depress economic activity.

Yes. If the income effect of a lower wage outweighs the substitution effect, an increase in the income tax would cause people to consume less leisure and work more.

Uncertain. Taxes have no predictable effects on behavior. Therefore, it's impossible to know how a higher income tax will affect willingness to work.

No. An increase in the income tax would lower the return to work, compelling people to substitute away from work and into leisure.