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Suppose that workers in an economy earn $15 per hour and can work for 3000 hours per year. This economy currently has a 25% tax
Suppose that workers in an economy earn $15 per hour and can work for 3000 hours per year. This economy currently has a 25% tax rate on all labor earnings, but is considering switching to a lump-sum tax of $1200 per person no matter how much they earn. Can we predict the effect of this change on hours worked for all individuals? Please explain and if you could with a graph as well
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