BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go up when tax rates go down. Why might this be the case?

To determine

To explain: The case when income tax revenue goes up when even the tax rates go down.

Explanation
When there is a decrease in the tax rate, tax-paying becomes more affordable then avoiding it as any malpractice with taxation will lead to penalties or imprisonment. So, generally when tax rates go down, tax evasion also decreases because then every avoider needs to choose between the benefit and harm of tax avoidance...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

I have good listening and empathy skills. 10 9 8 7 6 5 4 3 2 1

Understanding Management (MindTap Course List)

What is meant by catering theory, and how might it impact a firms dividend policy?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)