How can tax cuts help revive the economy

How can tax cuts help revive the economy - among those who...

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How can tax cuts help revive the economy? ECON312 When talking about tax cuts we need to look at all they would involve and what shape the current economy is in. We can look at the most important area which is the lower and middle class of America which is were most of us fall. We can also look at the cuts for business that are important to us because of the possible jobs they house. Tax cuts for the lower and middle class help build more income which would then create more spending. This spending would go to industries like automotive, household appliances, food, clothing and the likes. In turn this would create jobs and allow companies to keep employees. It would also put more money back into buy creating taxes collected for those items. “Tax credits for business would help keep employees working and create more spending
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Unformatted text preview: among those who are.” (Sammartino, 2001) This would help shift the aggregate demand which would put more tax money back into the government. It would also shift the aggregate supply and create more jobs in the long run. When we have a good balance between aggregate supply and demand we would have a better balance of government expenditure and collection thus possibly creating a surplus which could then go back into those well needed social services and other government created services. REFERENCES Sammartino, Frank (2001, January 01). Federal Income Tax Cuts and Low-Income Families . Retrieved from http://www.taxpolicycenter.org/publications/url.cfm?ID=410250...
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