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There is nothing paradoxical about the fact that cutting tax may increase revenue.
'''Tax cuts''' provide a stimulus to the economy, because they reduce the cost of doing business and allow ordinary citizens to spend or save or invest more of their own money. Often cutting a tax rate will, paradoxically, result in a net increase of [[tax revenue]]. The best example is the tax on [[capital gains]]. This phenomenon is described by the [[Laffer curve]], which states there exists a point when increasing taxes actually decreases tax revenue.
'''Tax cuts''' provide a stimulus to the economy, because they reduce the cost of doing business and allow ordinary citizens to spend or save or invest more of their own money. Often cutting a tax rate will result in a net increase of [[tax revenue]]. The best example is the tax on [[capital gains]]. This phenomenon is described by the [[Laffer curve]], which states there exists a point when increasing taxes actually decreases tax revenue.
[[Category:Economics]]
[[Category:Economics]]
[[Category:Department of the Treasury]]
[[Category:Department of the Treasury]]