A city government imposes

A city government imposes

A city government imposes a proportional income tax on all people who earn income within its city limits. In 2010, the city?s income tax rate was 0.05 (5 percent), and it collected $20 million in income taxes. In 2011, it raised the income tax rate to 0.06 (6 percent), and its income tax collections declined to $19.2 million. What happened to the city?s income tax base between 2010 and 2011? How could this have occurred?

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