Since the worker cannot pass on the marginal tax but must nevertheless maximize utility, he or she no longer accepts as high a disutility of labor. Consequently, the supply schedule in each labor market is diminished (). The extent to which the labor supply shrinks in a given market depends in large part on the marginal tax rates for the workers in that market, which may vary from market to market, particularly under a graduated income tax. Because of the decreased availability of labor at any given wage, production at the former free-market levels is no longer possible. Hence production proceeds at a lower pace, leading to a decreased abundance of consumer goods in the marketplace, i. e., what we usually call a "lower standard of living." The decreased supply of labor is also reflected in a diminished availability (at any given cost) of all personal services, including medical care, automotive repair, and so forth.     

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