fishy4 asked in Social ScienceEconomics · 1 decade ago

How can tax cuts help revive the economy?

2 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    Badly? Ineffectively?

    Tax cuts do have some stimulus effect, but much less than other measures. And permanent tax cuts are much worse than temporary certain temporary ones:

    http://www.thenextright.com/mead50/spending-vs-tax...

    http://www.dismal.com/mark-zandi/documents/assissi...

    • Login to reply the answers
  • 1 decade ago

    Some would say tax cuts, while holding government spending steady, will have no effect. The public will foresee that the money they are getting back now is money that will later on be taken back by an increase in taxes. As a result the public will not use the money from the tax cuts to increase their spending. But that's just what some might say. I don't think it's exactly the case.

    • Login to reply the answers
Still have questions? Get your answers by asking now.