Question

Explain why the bush’s tax cuts was or was not a good idea .

Answer 1

Bush's tax cut or economic growth & tax relief reconciliation act of 2001 was passed to fuel the economic growth and tax cut was identified as a fiscal policy tool to promote the economic growth. It was a good idea, because tax cut made people and specifically middle class and lower income group to have relatively bigger disposable income at home to spend more. It made stimulation of aggregate demand and economy created new jobs as well. Besides, the strategy of tax cur, helped government to prevent government spending that had to be done by taking additional debt from the market. It could increase the total debt as a % of GDP and it could bring additional burden to the coming generation. It was prevented with the tax cut plan or the given act. So, tax cut was a good idea.