Both presidents Kennedy and Reagan proposed significant cuts in income taxes because
A)at the time of their proposals the federal government was experiencing budget surpluses; that is, tax revenue exceeded government expenditures.
B)they wanted to offset their proposals to increase other taxes.
C)state governments had increased their taxes and they believed the tax cuts they proposed would result in most citizens paying about the same total state and federal taxes.
D)they believed that the tax cuts would enhance economic efficiency.

Question

Quizplus · Accepted Answer

Both presidents Kennedy and Reagan believed that cutting income taxes would stimulate economic growth by increasing incentives for work, investment, and entrepreneurship. They subscribed to the supply-side economic theory which suggests that lower tax rates result in more economic activity and ultimately more tax revenue. Therefore, the main reason for proposing significant cuts in income taxes was to enhance economic efficiency.

Both Presidents Kennedy and Reagan Proposed Significant Cuts in Income