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Fiscal Policy: Tax Cut Outcomes

Fiscal Policy: Tax Cut Outcomes

Fiscal Policy: Tax Cut Outcomes
Clarity on the winners and losers of tax cuts is important for taxpayers, because it tells the public what legislators aim to accomplish and the effects of the tax cuts on them. Tax cuts reduce government revenue and if government spending is not reduced by the same amount of the tax cut or more, the deficit increases. When the government deficit increases, it crowds out private investments and reducing government spending to accommodate the tax cuts adversely affects government purchases and employment in the private sector.

Ellis

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