A government wants to reduce income inequality by implementing a progressive tax system. If the government imposes a tax rate of 20% on income between ₦100,000 and ₦200,000, and a tax rate of 30% on income above ₦200,000, what is the opportunity \cost of the government's tax policy?

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The reduction in economic growth

Post Utme Unilag 2024 Economics Question 22

A government wants to reduce income inequality by implementing a progressive tax system. If the government imposes a tax rate of 20% on income between ₦100,000 and ₦200,000, and a tax rate of 30% on income above ₦200,000, what is the opportunity \cost of the government's tax policy?

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