Which one of the following propositions would a p proponent of supply-side economics be most likely to stress()
A. Higher marginal tax rates will lead to a reduction in the size of the budget deficit and lower interest rates, since they expand government revenues.
B. Higher marginal tax rates promote economic inefficiency and thereby retard aggregate output, since they encourage investors to undertake low productivity projects with substantial tax-shelter benefits.
C. Income redistribution payments will exert little impact on real aggregate supply, since they do not consume resources directly.
参考答案:B
解析:
Supply-side economists argue that higher tax rates lower workers’ incentive to work hard and reduce the overall efficiency level of labor. For example, workers may not participate in overtime opportunities if doing so places them in a higher tax bracket. That is, they may forgo the additional hours because they get to keep a smaller portion of the additional income. They may feel that the extra money they get to keep may not justify the extra work.