Final answer:
Implementing progressive income tax rates likely increases equality and decreases efficiency due to the trade-off between redistributing income and maintaining incentives for higher earners.
Step-by-step explanation:
When the government implements programs such as progressive income tax rates, it is likely that equality is increased and efficiency is decreased. This occurs because progressive taxation is designed to redistribute income from wealthier individuals to those with less income, thereby increasing equality. However, some argue that this can also decrease efficiency by reducing the incentives for those at the higher end of the income scale to earn and invest more, as they face higher tax rates on additional income. This trade-off is depicted in Figure 15.10, which shows that there are points where equality can increase with little impact on economic output, but too aggressive a push for equality will tend to reduce economic output.
This trade-off between incentives and economic equality is an important concept in economics. While some government programs might initially increase both economic output and equality, like the provision of public education, there is typically a point where increased efforts for equality begin to impact economic efficiency negatively.