Economists dismiss the idea that lower tax rates can lead to higher tax revenue, because there is a consensus that the relevant elasticities of demand and supply are very low.

Question

Quizplus · Accepted Answer

While some economists argue that lower tax rates can lead to lower tax revenue due to decreased government income, others, citing the Laffer Curve, suggest that under certain conditions, lower tax rates can actually increase tax revenue by stimulating economic activity and increasing the taxable income base. There is no universal consensus among economists on this issue, as it heavily depends on the specific context and the existing tax rates prior to the cut.

Economists Dismiss the Idea That Lower Tax Rates Can Lead