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Supply-side economics (view source)
Revision as of 05:05, December 31, 2011
, 05:05, December 31, 2011Supply-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.
'''Supply-side economics''' is the idea that high [[marginal tax rates]] stifle economic growth and that, at certain points, cutting [[tax rates]] can increase the [[supply]] of [[goods]] and [[services]] without lowering [[tax]] revenues.
'''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.
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.
==History==
==History==