41.   Only if this is the case does the tax rate in the system not climb sharply.

42.   The tax rate where actual income is maximized is in part of the figure.

43.   The lower tax rate is the tax rate at which recorded income is maximized.

44.   Laffer argued that with a high tax rate, say a move to a lower one, say, would raise actual income, recorded income and tax revenue.

45.   Oates found that property values were negatively correlated to the tax rate.

46.   Progressive tax systems usually involve higher marginal tax rates for higher earnings.

47.   Changes in tax rates generate income and substitution effects by altering the slope of the segments.

48.   Third, the assumption is that individuals are fully aware of tax rates.

49.   Again, solicitors and accountants may have greater awareness of tax rates, but this is less likely for the man in the street.

50.   To recap the method, direct taxes have a legal framework facilitating the assessment of the overall effective marginal tax rates.