Question

Policymakers focus on marginal tax rates changes when making changes in the tax code because the marginal tax rate:_____

Answer 1

Answer:

d. affects people's willingness to work save, and invest.

Explanation:

Marginal tax rate by definition is the rate of tax charged when an individual makes an additional dollar of income. If workers are charged higher tax rates , they are more likely to work less, to not  look for higher paying jobs or  not work at all than if they faced lower rates. A lower tax rate may be a good idea for policymakers but it could eliminate assistance given to poor families and individuals. Therefore each option has a tradeoff.