Question

How do you think the Tax Cut and Jobs Act of 2017 affects behaviors of economic agents (e.g., business corporations or individuals)? What were your assumptions for your conclusion?

Answer 1

Answer; The act is based on the on the reform advocate by congressional republicans.

Government new policy to reduce the tax rates across the board will definitely reduce the revenue of government in short run. Or in other words, immediate impacts would not be favorable for government. Fall in tax will reduce income of government.

But it is expected that over the long run, tax incentives will encourage more investment and economic activities, These desirable fallout would increase GDP of country and automatically income of country will rise.

To sum up. Government revenue will fall in short run but over the long run, it might experience rise in revenue.