Problem
Effects of Proportional Income Tax on Labor Supply . Suppose that the government imposes a proportional income tax on the consumer's wage income. That is, the consumer's wage income is (1 - t)w(h - l), where t is the tax rate. Determine effects of an increase in the income tax t on consumption, leisure, and labor supply. Explain your results in terms on income and substitution effects.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.