The income effect is in effect for all taxpayers

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Congress would like to increase tax revenues by 10.5 percent. Assume that the average taxpayer in the United States earns $61,000 and pays an average tax rate of 20 percent.

a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 10.5 percent increase in tax revenues? (Round your answer to 2 decimal places.)

Reference no: EM131216816

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