Why it is difficult to predict impact of tax cut on labor

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Question: In 2006, President George W. Bush proposed a cut in marginal income tax rates. Explain why it is difficult to predict the impact of such a tax cut upon labor supply on the basis of theory alone. If there were no political or legal impediments to doing so, how could you design an experimental study to estimate the impact of lower marginal tax rates on labor supply?

Reference no: EM131490226

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