Question of the Day

Do higher marginal tax rates generally reduce the incentive to work?

Correct Answer

Tell Me More

Economists broadly agree that higher marginal tax rates reduce the incentive to work, because they reduce the financial rewards of working. Economists disagree over the strength of this effect, but even prominent liberal economist Paul Krugman has written, "Any income tax system will tax away part of the gain an individual gets by moving up the income scale, reducing the incentive to earn more."

DocumentationEconomic Effects of Taxes



Reload Question
Share via Facebook
Share via Twitter
Share via Email
Embed into your website
About the Fact App
Articles by Topic