Ronald Reagan believed that reducing income tax rates would
A)do little,if anything,to encourage hard work.
B)result in large increases in deadweight losses.
C)raise economic well-being and perhaps even tax revenue.
D)lower economic well-being,even though tax revenue could possibly increase.

Question

Quizplus · Accepted Answer

Ronald Reagan believed in supply-side economics, which holds that lowering tax rates will increase economic growth and ultimately lead to higher tax revenue. This theory suggests that reducing income tax rates will encourage people to work harder, leading to increased economic activity and higher government revenue. So, the answer is C - reducing income tax rates would raise economic well-being and perhaps even tax revenue.

Ronald Reagan Believed That Reducing Income Tax Rates Would