To increase the economy, the AS curve should shift to the right. Which will always benefit the company first.
Focus on marginal tax rates: amount paid on the last dollar earned or on each additional dollar earned.
By reducing marginal tax rate, supply-sider believe that you will encourage more people to work longer and forgo leisure time for extra income.
Support policies that promote GDP along with the current system of transfer payments provides disincentives to work, invest, innovate, and undertake euntrepenure ventures.
Laffer curve: trade off between tax rates and government revenue. Used to support that supply side argument.
Impact of tax rates on incentives to work save and invest are small.
Tax cuts incease demand which can furl inflation, and causes demand to exceed supply. Economy is actually located in the curve is difficult to determine.
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