Role of economic theory Consider analyzing table 2. 1 As marginal tax rates have increased average weekly hours have decreased from 1955to2001 Can we conclusively say that taxes have depressed labor supply? No Nonlabor income rose(dividends, interest) Attitudes may have changed4 Role of economic theory • Consider analyzing Table 2.1 – As marginal tax rates have increased, average weekly hours have decreased from 1955 to 2001. – Can we conclusively say that taxes have depressed labor supply? No. • Nonlabor income rose (dividends, interest) • Attitudes may have changed