A decrease in income taxes can help growth and harm growth at the same time.

Question

Quizplus · Accepted Answer

A decrease in income taxes can help growth by providing consumers with more disposable income, which can lead to increased spending and stimulate the economy. However, it can also harm growth by reducing government revenue, which may limit the government's ability to invest in public infrastructure and services that support economic growth. Additionally, if the decrease in income taxes leads to an increase in government borrowing, it may hurt the economy in the long term by increasing the national debt and potentially leading to higher interest rates and inflation.

A Decrease in Income Taxes Can Help Growth and Harm