According to the supply-side view of fiscal policy, if the impact on tax revenues is the same, does it make any difference whether the government cuts taxes in a way that reduces marginal tax rates or in a way that does not reduce marginal tax rates?

Question

Quizplus · Accepted Answer

According to the supply-side view of fiscal policy, lowering marginal tax rates will increase the incentive for people to work and invest, leading to an increase in aggregate supply. On the other hand, if the government cuts taxes in a way that does not reduce marginal tax rates, it may not stimulate additional supply-side effects. Therefore, it does make a difference whether the government cuts taxes in a way that reduces marginal tax rates or in a way that does not reduce marginal tax rates.

According to the Supply-Side View of Fiscal Policy, If the Impact