Question

10. The only potential bright spots some observers see on the horizon is the lower personal tax rates and higher take-home pay under the federal tax reform that will begin at midyear. Why might this be a bright spot? How might lower tax rates affect individual incentives spend, save, and investment?

Answer 1

Lower personal tax is bright spot becuase the income they take after tax cuts will be high which means they have more money to have for spending for their daily economic activities.

Lower tax rates will make individual to have more money thus it will lead them to increase spending, also increase the amount of investment which inturn also have them increase their incentives and they will try to work more hours to increase more money which inturn increase the output of the economy. This lower tax cuts will also make them save more money.