Question: The top marginal tax rate was lowered from 90 percent

The top marginal tax rate was lowered from 90 percent to 70 percent in 1964. Following this change, the number of annual championship boxing matches increased substantially [Fetter, 2010]. Explain this phenomenon using the theory of labor supply. For championship level boxers, did the income effect or substitution effect dominate?


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  • CreatedMarch 25, 2015
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