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    Tax cuts to revive economy

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    Question: How can tax cuts help revive the economy? Explain.

    Your answers must include fiscal policy, expansionary fiscal policy, tax multiplier, Aggregate Demand, etc. You must use at least one article. Thank You

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    Solution Preview

    Tax cuts provide a "break" to those paying taxes and can be given either to all taxpayers, or to those in certain brackets. We are seeing this debate going on in our government right now. The richest group of taxpayers pay the largest portion of taxes in order to sustain our government, the wealthiest 5% of people in the United States pay more than 50% of the money that the government receives as tax revenue. That percentage decreases as peoples income bracket lowers with the poorest 50% of the population contributing only 4% of total tax revenue. Cutting taxes in a poor economy injects money directly where it can do the most good, into the consumers pocket. From there, two ...

    Solution Summary

    This solution helps describe how tax cuts can spur the economy. This solution is approximately 450 words in length.