Senator Brown wants to increase taxes on people with high incomes and use the money to help the poor.Senator Johnson argues that such a tax will discourage successful people from working and will therefore make society worse off.An economist would say that
A)we should agree with Senator Brown.
B)we should agree with Senator Johnson.
C)a good decision requires that we recognize both viewpoints.
D)there are no tradeoffs between equity and efficiency.

Question

Quizplus · Accepted Answer

The economist would acknowledge the validity of both arguments. Senator Brown's proposal could increase the equity in society by redistributing wealth to the poor, but it may also reduce incentives for high-income earners to work and innovate. Senator Johnson's concerns about the potential negative impact on efficiency and economic growth are also valid. Therefore, a good decision would require a balance between equity and efficiency, taking into account the specific context and trade-offs involved.

Senator Brown Wants to Increase Taxes on People with High