While tax cuts may increase productivity,the government is forced to redistribute the tax burden or cut its own spending.

Question

Quizplus · Accepted Answer

Tax cuts typically lead to a reduction in government revenue, which forces the government to either cut its own spending or redistribute the tax burden to taxpayers in other ways to make up for the shortfall. This is known as the "budget constraint" and is a fundamental principle of economics.

While Tax Cuts May Increase Productivity,the Government Is Forced to Redistribute