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Inherent in any analysis of health impacts are uncertainties in affected populations, health baselines, incomes, effect estimates, and other factors.
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The income effect results when taxes rise.
Several studies show this income effect can outweigh the initial price effect.
If this income effect were to become powerful enough, it would be a nice irony.
There may also be change in the income effect for those on low wages.
The two main behavioral responses to higher tax rates are the income effect and the substitution effect.
If this "income" effect outweighs the substitution effect, people will work less hard and pay less tax.
Labor is not as mobile as financial capital, and the income effect helps offset the substitution effect.
Leisure is a good like any other, and has a positive income effect; as people have more income, they want to consume more of it.
The income effect occurs when a taxpayer works harder, earning more income to offset the tax and maintain a level rate of consumption.
For small changes in interest rates, says Mr Jessop, the income effect may dominate, but for large changes the substitution effect may be more important.
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CEO of Professional Science Editing for Scientists @ prosciediting.com