If the income effect is in effect for all taxpayers

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Congress would like to increase tax revenues by 7 percent. Assume that the average taxpayer in the United States earns $42,000 and pays an average tax rate of 10 percent.

If the income effect is in effect for all taxpayers, what average tax rate will result in a 7 percent increase in tax revenues? average tax rate?

Reference no: EM131219314

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