contestada

Song earns $110,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $22,000 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent. What will happen to the government’s tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $82,500 in taxable income?