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Unformatted text preview: Domestic Economic Policy Throughout the '20s, the government's pro-business policies were reflected in tax cuts, a reduction in federal spending, and high tariffs. Under Secretary of the Treasury Mellon, who served all three Republican presidents, the maximum rate on personal income was significantly lowered, as were estate taxes and taxes on excess profits. Mellon's tax program directly benefited the rich based on the assumption that they would invest their money and stimulate the economy. The economy was also aided by the decrease in government expenditures; Mellon managed to balance the budget, and his programs helped to lower the national debt by nearly $10 billion between 1919 and 1929. The government also tried to shield domestic interests from foreign competition through the Fordney- McCumber Tariff (1922) which increased rates, removed items from the free list, and raised duties...
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- Fall '08