Across-the-board tax cuts may not have the desired result because

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Across-the-board tax cuts may not have the desired result because people with different incomes spend differing amounts of additional income. This phenomenon is known as the marginal propensity to consume (MPC). Low-income households tend to spend a higher percentage of their additional income, while high-income households tend to save a larger percentage of their additional income. Therefore, tax cuts may lead to greater economic inequality since those with higher incomes receive a larger tax cut and are less likely to spend the additional income, leading to less stimulation of the economy overall.

Across-The-Board Tax Cuts May Not Have the Desired Result Because