A taxpayer faces the following MTRs for labor income: The taxpayer can earn $10 per hour. In
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The taxpayer can earn $10 per hour. In the absence of any taxes, he would work an average of eight hours a day. Show how the tax affects his income leisure budget line and analyze the possible effects on his equilibrium allocation of time to work and leisure, assuming that leisure is a normal good.
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AVERAGE DAILY LABOR EARNINGS (DOLLARS MTR (PERCENT) 0-20 20-40 40-80 80 and above 20 30 40
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Related Book For
Public Finance A Contemporary Application of Theory to Policy
ISBN: 978-1285173955
11th edition
Authors: David N Hyman
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