Tax Revenue and Marginal Tax Rates: Laffer Curve 31. The Laffer Curve is a critical component in the theory of Supply Side Economics. 32. Starting with President Regan, in 1980 the argument was that marginal tax rates were too high. So lowering the tax rate would raise total government tax revenue. 33. The second key concept is that If you cut business taxes it would create a wave of Investment spending. 34. Thus, shifting out the PPF would increase average income for all households. Why? The Laffer Curve 35. Thus, cutting taxes for the corporations and the wealthy will create a "trickle down effect." 36. Empirical economic evidence Indicates that: 37. During Reagan's presidency, the national debt grew from $997 billon to $2.85 trillion. 38. This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation (U.S. Dept. Treasury). 39. As polnted out in slide 12 on Income distribution, the 60% of American households have experienced a continual decline in share of national Income since 1980. 0% 100% 40. What about the Current Tax Cut? Tax Rate 6:12/ 6:50 YouTube CC The Laffer Curve theorizes that the level of marginal U.S. tax rates effect the level of Select one: a. U.S. poverty rate b. level of income inequality in the U.S. C. government tax revenues collected d. the level of household spending

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Tax Revenue and Marginal Tax Rates: Laffer Curve
31. The Laffer Curve is a critical component in the theory of
Supply Side Economics.
32. Starting with President Regan, in 1980 the argument was that
marginal tax rates were too high. So lowering the tax rate
would raise total government tax revenue.
The Laffer Curve
33. The second key concept is that if you cut business taxes it
would create a wave of investment spending.
34. Thus, shifting out the PPF would increase average income for
all households. Why?
35. Thus, cutting taxes for the corporations and the wealthy will
create a "trickle down effect."
36. Empirical economic evidence indicates that:
37. During Reagan's presidency, the national debt grew from
$997 billion to $2.85 trillion.
38. This led to the U.S. moving from the world's largest
international creditor to the world's largest debtor nation
(U.S. Dept. Treasury).
39. As pointed out in slide 12 on income distribution, the 60% of
American households have experienced a continual decline in
share of national income since 1980.
0%
100%
40. What about the Current Tax Cut?
Tax Rate
D 6:12 / 6:50
CC YouTube
[)
LJ
The Laffer Curve theorizes that the level of marginal U.S. tax rates effect the level of
Select one:
a. U.S. poverty rate
b. level of income inequality in the U.S.
C. government tax revenues collected
d. the level of household spending
Government Revenue
Transcribed Image Text:Tax Revenue and Marginal Tax Rates: Laffer Curve 31. The Laffer Curve is a critical component in the theory of Supply Side Economics. 32. Starting with President Regan, in 1980 the argument was that marginal tax rates were too high. So lowering the tax rate would raise total government tax revenue. The Laffer Curve 33. The second key concept is that if you cut business taxes it would create a wave of investment spending. 34. Thus, shifting out the PPF would increase average income for all households. Why? 35. Thus, cutting taxes for the corporations and the wealthy will create a "trickle down effect." 36. Empirical economic evidence indicates that: 37. During Reagan's presidency, the national debt grew from $997 billion to $2.85 trillion. 38. This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation (U.S. Dept. Treasury). 39. As pointed out in slide 12 on income distribution, the 60% of American households have experienced a continual decline in share of national income since 1980. 0% 100% 40. What about the Current Tax Cut? Tax Rate D 6:12 / 6:50 CC YouTube [) LJ The Laffer Curve theorizes that the level of marginal U.S. tax rates effect the level of Select one: a. U.S. poverty rate b. level of income inequality in the U.S. C. government tax revenues collected d. the level of household spending Government Revenue
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Government Spending
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education