Are Tax Cuts Promoting Economic Growth Essay Example | Topics and Well Written Essays - 500 words

Are Tax Cuts Promoting Economic Growth - Essay ExampleAnd the alike(p) thing can be seen happening with President Bushs 2003 tax cuts since 2003 annual GDP has increase by 4.3% as opposed to the 2.4% during the two years preceding.There can, however, be a downside to tax cuts. If the taxpayers save their increased income or buy outsourced commodities, the government may have to deal with balance of payments difficulties that could cause a deflationary effect leading to a budgetary crisis with a painful readjustment to follow (Wikipedia, 2006, n.p.). But how some(prenominal) people do you know bother to put their tax returns into savings or shop abroad Of course, you can buy almost anything from anywhere on the Internet, so the downside might be all withal accessible these days.An alternative to cutting taxes is to increase minimum wage. Of course, that comes with its own share of downsides mainly, the same downsides that tax cuts have. composition researchers could find no stati stically significant relationship between minimum wage rate increases and work failures (Rendell, 2006, n.p.), it is still no better than tax cuts and prone to the same downsides. So, when in doubt, cut taxes.Of course, doing both at the same time could produce some interesting results.