ipl-logo

Supply Side Economics

1084 Words5 Pages

Tax is one of the most talked and disliked thing in the world. Because of that, no one fancy’s paying higher taxes. However, we live in real world, and sometimes we need to do things we don’t like. Even though most people agree that higher tax rates are bad, but they don’t know how to fix it and come up with the ideal tax bracket. Most of the time the discussion around this issue intense and spirited. For instance, you two political parties in US with different ideas. The Democrats want to raise taxes in believe that it will bring huge revenues and it will help cut the deficit and help the government to spend on public services. On the other hand, you have Republicans who believe in supply-side economics which says that tax cuts will stimulate …show more content…

This theory is very popular for conservative in US and says that increase in factors of production such as capital, labor, entrepreneurship, and land drives the economic growth. It says higher taxes and too many regulations are barrier for the growth. Hence, the theory encourages lower taxes and fewer regulations assuming that this will give small and big businesses an incentive to expand their capacity and help the people. Also, it will give non-business people more income in which they could spend on buying more goods and services. One of the bedrocks of supply economics is Laffer curve. This curve shows the relationship between tax rates and tax revenues. It says that the more you raise the tax rate the more tax revenue you collect until you reach to a maximum point where the tax revenue starts falling. Another idea that supports tax cuts is an expansionary fiscal policy even though it is usually applied during recession; which says that tax reduction will boost the economy by increasing savings and …show more content…

These cuts were taken in 2001, and in 2003; they were called Economic Growth Tax Relief Reconciliation Act of 2001(EGTRRA) and Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). The results of these tax cuts were not good. They didn’t create that much of many jobs. Instead, the top 1% of the population was the highest beneficiaries of the cuts. According to NY times and Center on Budget and Policy Priorities the top 1% of the households got an average about $50,000 a year because of the tax cuts. While the bottom 20% saw the income only jumping a minuscule 1% after the tax cuts. The figure below illustrates just

Show More
Related
411 Words | 2 Pages

Tax relief for the rich would allow them to spend and invest their money. This spending would fuel the economy and create new jobs. Reagan believed that these tax cuts would ultimately generate more revenue for the federal government. Congress was not as confident as Reagan, but they did approved a 25 percent

Read More
627 Words | 3 Pages

Regan believed that taxes were one of the biggest reasons for the awful economy of the U.S. He believed that by cutting taxes, he would drastically improve the economy of the U.S.. As stated in the article “Political Career and Presidency of Ronald Reagan” Reagan signed," into law his sweeping tax cuts and budget cuts. "("Political " 2) on August 13th, 1981.

Read More
566 Words | 3 Pages

People may not like taxes but they are used to invest in new Technology, education and public welfare of the people like Medicare, Medicaid, social security, and general protection. They can borrow money but that always affect taxpayers but the money will always be repaid to the lenders but the only way is by raising taxes (Concurrent Powers). Concurrent powers are able to enforce laws, "...law

Read More
447 Words | 2 Pages

The goal was to decrease the budget deficit, stimulate private sector growth, and create more investment and capital formation opportunities. One of the biggest criticisms of Reaganomics is that it made income inequality worse. Critics say that the tax cuts mainly helped rich people, which caused wealth to be concentrated among them and left middle and lower-income earners with low wages. However, supporters argue that these policies actually helped the economy grow, which eventually benefited

Read More
1664 Words | 7 Pages

This tax relief helped upper-class Americans. Under the Reagan Administration, the tax rate was reduced further to 28% all the while investors were investing at the most $2000 yearly in IRAs (Individual Retirement Accounts) w/o paying taxes. Republicans and conservative Democrats (boll weevils) cut $40 billion from domestic aid programs (food stamps, student loans, mass transportation), but they increased heavily in the military. Despite the cuts to aid programs, he help strengthen Social Security by increasing the amount paid, raising the age for benefits to 67, and taxing some benefits given to upper-class. The Reagan administration reduced business regulations through banks, trusts, and environmental protection, which in turn helped to make the government have a smaller role in people’s lives.

Read More
690 Words | 3 Pages

In the Speech, Reagan is saying that we need tax reform because the government is too involved is too involved in economics, and being unfair by taking so much. However, they both

Read More
932 Words | 4 Pages

From this, although Ronald Reagan went to far reaches to achieve the economic and foreign policy goals of the New Right conservatives and other movements, he crippled and cut funds to critical programs, including Medicare, education, and other social programs, thus hurting many people as a result of these new reform changes. Many of the economic and foreign policy goals of the New Right conservatives were accomplished by Ronald Reagan, with the most notable being tax deductions and fixing unemployment issues. In his address to the nation on August 3, 1981 President Reagan discussed tax rates and his solution of budget cuts by stating that, “With our budget cuts, we’ve presented a complete program of reduction in tax rates….to provide incentive for the individual, incentives for business to encourage production and hiring of the unemployed, and to free up money for investment” (3). The two primary goals that the New Right Conservatives believed in was that the government should fix unemployment issues and reduce tax rates so that there would be a smaller gap between the rich and

Read More
531 Words | 3 Pages

Some people with be mad about getting taxed more and some people wouldn’t mind getting taxed more as long as it is doing something like helping someone that needs help or saving their lives. “About 800 000 people commit suicide every year… Mental disorders and harmful use of alcohol contribute to many suicides around the world. ”(www.who.int) The people I think that won’t like getting taxed the most are people like Lennie and George who are struggling with money as is

Read More
376 Words | 2 Pages

Reagonomics The Supply Side of Economics was first presented to the world during the late 1970’s as a byproduct of the Keynesian economic policy. This form of economics argues the fact that with the introduction of reducing the tax rates along with governmental regulations, the growth of the economy will be the result of the production for the supply goods and services at a much affordable price for the consumers of which may have access to more disposable income to spend on them. Just 10 years later, the Reagan and branded the supply side economics to the world that it is now recognized as Reaganomics. Overall, his vision of the supply side economics were predicated on four major principles.

Read More
968 Words | 4 Pages

One of the arguments used is that we could regulate and tax the 1% income because that would be “fair” but these numbers show how harmful that way of thinking is. 18% of taxes for the “bottom” of the bracket which is around 20% of the U.S population.

Read More
980 Words | 4 Pages

“The Federal tax system has always served purposes beyond the collection of revenue to fund Government programs” (Farrigan). The people of the United States pay taxes to the government to multiply the money by doing business related negotiations with other countries. In addition, the government uses the peoples tax money in programs such as Medicaid or children’s health insurance, food stamps, and unemployment benefits. Consequently, the government gives back the people’s tax money, but because of the people the government can support, give, and help the people in need. The government multiplies the peoples tax money and since the people are investing their tax money than is only right the people get a beneficial raise on their tax return money.

Read More
147 Words | 1 Pages

The federal tax system is plagued with issues: It doesn 't raise sufficient revenue to back government spending, it is unpredictable, it makes results that are unreasonable, and it impedes monetary productivity. This part examines a few approaches to enhance charges, including making an esteem included duty, expanding natural taxes, improving the corporate expense, treating low-and center pay workers evenhandedly and productively, and guaranteeing suitable tax collection of high-wage family units. A good tax system raises the incomes expected to fund government spending in a way that is as basic, evenhanded, and development well growth as could reasonably be expected. The United States does not have a good tax system.

Read More
411 Words | 2 Pages

The article says, “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.” (Stiglitz 2011) While the rich are getting higher incomes prices the poor are getting higher income by taking it from the one in the middle which therefore, makes them get a lower income percentage. America has fallen behind because of not being an equal country to the population by the income equality there is a huge gap between the income being earned by the poor and the rich. The rich are wealthy and the poor depend on the government for everything. As stated in the article, “America lags behind any country in the old, ossified Europe that President George W. Bush used to deride.

Read More
546 Words | 3 Pages

There's no doubt that Friday is the most anticipated day of the week. The promise of a fun weekend, the chance to catch up on some sleep, or do absolutely nothing are just many of the freedoms the weekend offers. However, this freedom is only brief as we return to our monotonous jobs, but what if we did not have to return? How would humans as a civilization function with this new found freedom if we had autonomous robots and artificial intelligence(AI) doing the “less desired ” jobs and task instead of us? With the advancements in autonomous technology we may soon find out.

Read More
791 Words | 4 Pages

Classical economics emphasises the fact free markets lead to an efficient outcome and are self-regulating. In macroeconomics, classical economics assumes the long run aggregate supply curve is inelastic; therefore any deviation from full employment will only be temporary. The Classical model stresses the importance of limiting government intervention and striving to keep markets free of potential barriers to their efficient operation. Keynesians argue that the economy can be below full capacity for a considerable time due to imperfect markets. Keynesians place a greater role for expansionary fiscal policy (government intervention) to overcome recession.

Read More

More about Supply Side Economics

Related Topics

Open Document