Changes

'''Supply-side economics''' is recognition that [[demand]] is not completely independent of [[supply]]: demand for a good or service often increases if its affordable supply increases.  For example, construction of a free highway will result in its increasing use over time.

'''Supply-side economics''' is a concentration of economic forces on incentives, verses demand-side which place mandates on producers with the assumption goods and services will be available for consumers and beneficiaries of government [[entitlement]]s.

 

Technically it can be defined as recognition that [[demand]] is not completely independent of [[supply]]: demand for a good or service often increases if its affordable supply increases.  For example, construction of a free highway will result in its increasing use over time.

In [[macroeconomics]], the implications of this insight are that cutting tax rates can increase the supply of [[goods]] and [[services]], and increase the demand for them, with an overall result of increasing [[tax]] revenues.  Conversely, high [[marginal tax rates]] stifle economic growth by reducing the potential supply of goods and services, and decreasing tax revenues.  Simply put, increasing taxes often decreases government revenue.

In [[macroeconomics]], the implications of this insight are that cutting tax rates can increase the supply of [[goods]] and [[services]], and increase the demand for them, with an overall result of increasing [[tax]] revenues.  Conversely, high [[marginal tax rates]] stifle economic growth by reducing the potential supply of goods and services, and decreasing tax revenues.  Simply put, increasing taxes often decreases government revenue.