Changes

'''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]].

'''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.  

[[Category:Economics]]

[[Category:Economics]]

[[Category:Department of the Treasury]]

[[Category:Department of the Treasury]]