Labor Supply Theoretical considerations Is it always the case that the person will reduce hours of work when a tax is imposed (or increased)? No. Figure 16.3 shows a case where hours of work increases from ft to JT (and the person is still worse off relative to no taxes)9 Labor Supply: Theoretical Considerations • Is it always the case that the person will reduce hours of work when a tax is imposed (or increased)? • No. Figure 16.3 shows a case where hours of work increases from FT to JT (and the person is still worse off relative to no taxes)