Suppose that the labor supply of married women is very sensitive to the after-tax wage (that is,

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Suppose that the labor supply of married women is very sensitive to the after-tax wage (that is, it is very elastic), whereas the labor supply of men is not. The government proposes to reduce the tax on income earned by married women by 5 percent, and raise the tax on earnings of married men by 15 percent. How would this tax change affect total tax revenues ? How would it affect the distribution of income ?

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Economics Of The Public Sector

ISBN: 9780393925227

4th Edition

Authors: Joseph E. Stiglitz, Jay K. Rosengard

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