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Major Arguments for and against Cutting Taxes to Promote Economic Development
Finance & Accounting
Pages 3 (753 words)
Author Name Instructor’s Name Assignment Subject Date of Submission The Major Arguments for and against Cutting Taxes to Promote Economic Development Introduction In his elaborate work Rethinking Growth Strategies published by Economic Policy Institute, Robert Lynch has taken a definite stand on the issue of cutting taxes in the context of the U.S.
Conversely, do state and local public services undermine growth? A review of the available data strongly suggests that the answer to both of these questions is no. And while state and local tax cuts may in theory stimulate economic activity, in practice they are unlikely to do so.” (2) In this paper, therefore, we are going to the major arguments for and against tax cuts and incentives as far as the promotion of economic development are concerned. Analysis According to theory, tax cuts stimulate the economy of a country. Hence, in theory, arguments in favor of tax exemptions are available. Particularly in the framework of neo-liberal economic policies, strong theoretical arguments defend tax cuts in an organized way. However, Lynch has chosen to set up counter-arguments in this context by evaluating each favoring theoretical argument critically and analytically. Lynch states, “The pressure to cut state and local spending is likely to persist as long as these jurisdictions continue to face budget deficits, demands for additional tax cuts, and calls for a smaller role for government.” (1) Hence, tax cuts directly confront government’s expenditure for the social sector. In theory, following arguments are furnished in favour of cutting taxes: 1. ...
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