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Common Sense: The Importance Of Low Tax Rates

310 Words2 Pages

One vital concept in the book, Common Sense, is the point at which it talks with regards to low tax rates, and how individuals will create increasingly when they are allowed to keep a greater amount of what they acquire. It mentions three reasons why high marginal tax rates will reduce output and income. According to Common Sense, these three reasons include high rates discouraging work effort and reduce the productivity, both the level and efficiency of capital formation, and how high rates encourage individuals to consume tax deductible goods over non tax deductible goods. A high marginal tax rate implies that for each extra dollar you acquire, the legislature will impose it at a higher rate than your lower wage. Ultimately, when tax rates

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