Answer: Tax is one of the major source of income for any government. If the government decides to reduce the rate of tax on marginal income, it will increase the wages of workers and reduce the income of the government, therefore motivating workers to work more and increase production. It will also increase consumption, because increase in wages tends to increase ones consumption, which will help to grow the economy or lead to inflation.
Tax cut will increase the population of people who will want to work, because of the increase in wages, thereby causing many others to be unemployed, because the government will not have enough income to great more Employment for it's citizens.
In summary, if tax rate is reduced people will not want to leave their jobs, because of an increase in wages, therefore vacancy for Employment will be difficult in firms, which will reduce the Employment rate, and increase the unemployment rate. Government will not have enough money to creat more jobs for people.
