Define the tax systems in certain cities

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Question: Most economists believe that a reduction in all statutory federal income tax rates in the United States would be unlikely to generate an increase in tax revenues. However, a recent study suggests that this might not be the case for the tax systems in certain cities [see Haughwout et al., 2004). Why might a reduction in tax rates be more likely to increase revenues at the city level rather than the federal level?

Reference no: EM131500129

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