If a government lowers the tax rate on goods and services but raises the tax rate on incomes, what is the probable effect on the distribution of income and on the incentive to work?
- Adistribution of income less equal; incentive to work decreased
- Bdistribution of income less equal; incentive to work increased
- Cdistribution of income more equal; incentive to work decreased
- Ddistribution of income more equal; incentive to work increased