Economics
Supply-Side Policies
Supply-side policies are government interventions aimed at increasing the productive capacity of the economy. These policies focus on reducing barriers to production, such as taxes and regulations, and increasing incentives for businesses to invest and innovate. The goal is to stimulate economic growth and create jobs.
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3 Key excerpts on "Supply-Side Policies"
No longer available |Learn more- (Author)
- 2014(Publication Date)
- Library Press(Publisher)
____________________ WORLDTECHNOLOGIES ____________________ Chapter- 7 Supply-side Economics Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. According to the theory, consumers will then benefit from a greater supply of goods and services at lower prices. Typical policy recommendations of supply-side economics are lower marginal tax rates and less regulation. Current supply-side economics is primarily concerned with economic growth in general, and does not hold that decreasing taxes increases government revenue. It is true that many early proponents argued that the size of the economic growth would be significant enough that the increased government revenue from a faster growing economy would be sufficient to compensate completely for the short-term costs of a tax cut, and that tax cuts could, in fact, cause overall revenue to increase. A 2003 piece on page A4 of the Wall Street Journal commented on a Congressional Budget Office report which concluded that taxes cannot be reduced without losing revenue, and declared the debate ended. The term supply-side economics was thought, for some time, to have been coined by journalist Jude Wanniski in 1975, but according to Robert D. Atkinson's Supply-Side Follies [p. 50], the term supply side (supply-side fiscalists) was first used by Herbert Stein, a former economic adviser to President Nixon, in 1976, and only later that year was this term repeated by Jude Wanniski. Its use connotes the ideas of economists Robert Mundell and Arthur Laffer. Today, supply-side economics is viewed by critics as a form of trickle-down economics.
No longer available |Learn more- (Author)
- 2014(Publication Date)
- College Publishing House(Publisher)
____________________ WORLD TECHNOLOGIES ____________________ Chapter- 7 Supply-side Economics Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. According to the theory, consumers will then benefit from a greater supply of goods and services at lower prices. Typical policy recommendations of supply-side economics are lower marginal tax rates and less regulation. Current supply-side economics is primarily concerned with economic growth in general, and does not hold that decreasing taxes increases government revenue. It is true that many early proponents argued that the size of the economic growth would be significant enough that the increased government revenue from a faster growing economy would be sufficient to compensate completely for the short-term costs of a tax cut, and that tax cuts could, in fact, cause overall revenue to increase. A 2003 piece on page A4 of the Wall Street Journal commented on a Congressional Budget Office report which concluded that taxes cannot be reduced without losing revenue, and declared the debate ended. The term supply-side economics was thought, for some time, to have been coined by journalist Jude Wanniski in 1975, but according to Robert D. Atkinson's Supply-Side Follies [p. 50], the term supply side (supply-side fiscalists) was first used by Herbert Stein, a former economic adviser to President Nixon, in 1976, and only later that year was this term repeated by Jude Wanniski. Its use connotes the ideas of economists Robert Mundell and Arthur Laffer. Today, supply-side economics is viewed by critics as a form of trickle-down economics.
eBook - PDFThe American Dream vs. The Gospel of Wealth
The Fight for a Productive Middle-Class Economy
- Norton Garfinkle(Author)
- 2008(Publication Date)
- Yale University Press(Publisher)
Chapter VIII The Current Debate: Supply-Side vs. Demand-Side Economics ince the s the dispute between demand-side and supply-side economics has dominated the debate over U.S. tax policy. 1 Both sides acknowledge that tax cuts can stimulate the economy during a downturn, but the two sides view the problem, as it were, through opposite ends of the telescope. Demand-siders emphasize the centrality of aggregate de- mand in driving economic expansions and contractions. When demand-siders discuss the potential benefits of cutting taxes during a recession, they emphasize the need to put money into the hands of the vast mass of consumers. The point is to in- crease consumer spending, which in turn will stimulate increased production—resulting in greater employment, investment, and a continuing growth in Gross Domestic Product (GDP). De- mand-siders therefore favor tax cuts that are weighted toward the middle and lower ranks of earners, who will naturally tend to spend more of any money they receive from tax reductions. Supply-siders turn this approach on its head. As their name implies, supply-siders see production, or supply, rather than demand as the main engine of U.S. economic growth. Their emphasis is on increasing business investment: in the supply-siders’ view, higher rates of investment will lead to higher rates of growth in GDP. For supply-siders, a key feature of the tax code is its “incentive effects.” By changing individual eco- nomic incentives, they believe, they can change economic be- havior by encouraging more business investment by upper- income taxpayers (the investor class). Supply-siders speak of lowering marginal tax rates across the board to increase incentives to “work, save, and invest.” But the supply-siders’ emphasis (and the feature that makes their program controversial) is clearly on lowering the top marginal rate, and the reason is its presumed impact on U.S.
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