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Briefly explain whether any of the following policies are likely to increase the rate of economic...

Briefly explain whether any of the following policies are likely to increase the rate of economic growth in the United States. Give economic rationale.

  1. Congress passes a law that allows taxpayers to reduce their income taxes by the amount of state sales taxes they pay.
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Answer #1

Yes this policy of reducing the income taxes will increase the growth rate of the economy. Due to this tax cuts the people will have more disposable income in their hands which will make them to consume more and save more. if people are consuming more than the demand for the goods and services will increase which will boost the production in the economy this making business to expand and employee more people to meet the demand. If tax cuts are there most people will try to work overtime so that they can earn more. All this things lead to growth in the economy. So due to tax cuts there will be an economic growth.

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