According to supply siders,tax cuts can raise total tax revenue if the tax cuts generate large enough:

Question

Quizplus · Accepted Answer

Supply siders believe that tax cuts can stimulate economic growth and increase aggregate supply. This can lead to higher levels of economic activity, increased profits, and ultimately higher tax revenues even at lower tax rates. However, for this to happen, the tax cuts need to be large enough to generate a significant increase in aggregate supply. In contrast, tax cuts that are too small may not have a significant impact on economic growth and may actually lead to lower tax revenues due to the reduction in government funding. Therefore, choice B is the best answer as it relates to the supply side theory of tax cuts.

According to Supply Siders,tax Cuts Can Raise Total Tax Revenue