Changes

They give incentives to work, save, and invest, thus creating jobs and increasing economic growth. [http://www.askheritage.org/Issues.aspx?ID=41]

They give incentives to work, save, and invest, thus creating jobs and increasing economic growth. [http://www.askheritage.org/Issues.aspx?ID=41]

When tax rates have been raised beyond the point of [[diminishing returns]] cutting a tax rate will result in a net increase of [[tax revenue]]. This may seem paradoxical but can be easily explained by the fact that lowering taxes can stimulate the economy. 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.  

When tax rates have been raised beyond the point of [[diminishing returns]] cutting a tax rate will result in a net increase of [[tax revenue]]. This may seem paradoxical but can be easily explained by the fact that lowering taxes can stimulate the economy. The best example is the tax on [[capital gains]].  This phenomenon is described by the [[Laffer curve]], which "illustrates the trade-off between tax rates and tax revenues."<ref name=laffer-ppf />

Laffer wrote:

Laffer wrote:

* Because tax cuts create an [[incentive]] to increase output, [[employment]], and [[production]], they also help [[balance the budget]] by reducing means-tested [[government expenditures]]. A faster-growing economy means lower [[unemployment]] and higher [[income]]s, resulting in reduced [[unemployment benefits]] and other social [[welfare programs]]. [http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future The Laffer Curve: Past, Present, and Future] - Arthur Laffer - June 1, 2004

* Because tax cuts create an [[incentive]] to increase output, [[employment]], and [[production]], they also help [[balance the budget]] by reducing means-tested [[government expenditures]]. A faster-growing economy means lower [[unemployment]] and higher [[income]]s, resulting in reduced [[unemployment benefits]] and other social [[welfare programs]].<ref name=laffer-ppf> [http://www.heritage.org/Research/Reports/2004/06/The-Laffer-Curve-Past-Present-and-Future The Laffer Curve: Past, Present, and Future] - Arthur Laffer - June 1, 2004</ref>

==Notes==

==Notes==