How Do High Marginal Tax Rates Affect the Economic Prosperity

question 45

Multiple Choice

How do high marginal tax rates affect the economic prosperity of a nation?

• A) They reduce the incentive of individuals to earn reported income.
• B) They encourage the nation's most productive citizens to emigrate to countries where taxes are lower.
• C) They discourage foreigners from investing in the country.
• D) All of the above are correct.

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Definitions:

Pure Substances

Materials that are made of only one type of atom or molecule.

Impure Mixtures

Combinations of two or more substances that are not chemically bonded together and can be separated by physical means.

Compute

To carry out mathematical or logical operations on data in order to obtain a result, often associated with the use of computers or calculators for complex calculations.

Kinetic Energy

Kinetic energy is the energy that an object possesses due to its motion, calculated as one-half the mass of the object times the velocity squared.