Examples of Tax Cuts in the following topics:
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- Tax cuts have a smaller affect on aggregate demand than increased government spending.
- In expansionary fiscal policy, the government increases its spending, cuts taxes, or a combination of both.
- The increase in spending and tax cuts will increase aggregate demand, but the extent of the increase depends on the spending and tax multipliers.
- When the government cuts taxes instead, there is an increase in disposable income.
- The multiplier effect of a tax cut can be affected by the size of the tax cut, the marginal propensity to consume, as well as the crowding out effect.
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- His promise of welfare reform in the 1992 presidential campaign and its subsequent enactment epitomized the New Democrat position, as did his 1992 promise of a middle-class tax cut and his 1993 expansion of the Earned Income Tax Credit for the working poor.
- This Act raised taxes on the wealthiest 1.2% of taxpayers while cutting taxes on 15 million low-income families.
- It also made tax cuts available to 90% of small businesses.
- Overall, the top marginal tax rate was raised from 31% to 40% under the Clinton administration.
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- Reagan implemented policies based on supply-side economics and advocated a classical liberal and laissez-faire philosophy, seeking to stimulate the economy with large, across-the-board tax cuts.
- Citing the economic theories of Arthur Laffer, Reagan promoted the proposed tax cuts as potentially stimulating the economy enough to expand the tax base, offsetting the revenue loss due to reduced rates of taxation, a theory that entered political discussion as the Laffer curve.
- The Tax Reform Act of 1986 was another bipartisan effort championed by Reagan, further reduced the top rate to 28%, raised the bottom bracket from 11% to 15%, and, cut the number of tax brackets to four.
- Despite the fact that TEFRA was the "largest peacetime tax increase in American history," Reagan is better known for his tax cuts and lower-taxes philosophy.
- Along with Reagan's 1981 cut in the top regular tax rate on unearned income, he reduced the maximum capital gains rate to only 20% – its lowest level since the Hoover administration.
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- In August 1981, after negotiations with the Republican-controlled Senate and the Democratic-controlled House proved to be fruitless, President Reagan signed the largest tax cuts in American history into effect at his California ranch.
- This bipartisan measure lowered income taxes significantly, with the top personal tax bracket dropping from 70% to 28% over the course of seven years.
- The net effect of all Reagan-era tax bills resulted in a 1% decrease of government revenues (as a percentage of GDP), with the revenue-shrinking effects of the 1981 tax cut (-3% of GDP) and the revenue-gaining effects of the 1982 tax hike (~+1% of GDP).
- However, Congress was reluctant to follow Reagan's proposed cuts in domestic programs.
- Reagan cut the EPA's budget by 22%, and his director of the EPA, Anne M.
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- In pursuing expansionary policy, the government increases spending, reduces taxes, or does a combination of the two.
- An increase in government spending combined with a reduction in taxes will, unsurprisingly, also shift the AD curve to the right.
- The extent of the shift in the AD curve due to government spending depends on the size of the spending multiplier, while the shift in the AD curve in response to tax cuts depends on the size of the tax multiplier.
- If government spending exceeds tax revenues, expansionary policy will lead to a budget deficit.
- If tax revenues exceed government spending, this type of policy will lead to a budget surplus.
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- To pay for these and other government programs, and to make up for revenue lost due to the Depression, Hoover agreed to roll back several tax cuts that his Administration had enacted on higher-bracket incomes.
- Harding and Calvin Coolidge) had proposed and enacted numerous tax cuts, which cut the top income tax rate from 73% to 24%.
- Congress was desperate to increase federal revenue, and in one of the largest tax increases in American history, the Revenue Act of 1932 raised income tax on the highest incomes from 25% to 63%.
- The estate tax was doubled and corporations were taxed at a higher rate of 13.75%.
- Also, a "check tax" was included that placed a 2-cent tax (equal to more than 30 cents in today's economy) on all bank checks.
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- Reagan’s primary goal upon taking office was to stimulate the sagging economy while simultaneously cutting both government programs and taxes.
- In other words, proponents of “trickle-down economics” promised to cut taxes and balance the budget at the same time.
- When Reagan proposed a 30% cut in taxes to be phased in over his first term in office, Congress balked.
- Opponents argued that the tax cuts would benefit the rich and not the poor, who needed help the most.
- Despite the fact that TEFRA was the "largest peacetime tax increase in American history," Reagan is better known for his tax cuts and lower-taxes philosophy.
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- Reagan’s policies of cutting taxes and increasing defense spending in relation to the Cold War had exploded the federal budget deficit, making it three times larger in 1989 than when Reagan took office in 1980.
- However with Republicans believing that the best way was to cut government spending, and Democrats convinced that the only way would be to raise taxes (particularly on the rich), Bush faced problems when it came to consensus building.
- In the wake of the struggle with Congress, Bush was forced by the Democratic majority to raise tax revenues; as a result, many Republicans felt betrayed because of Bush's "no new taxes" pledge.
- Angered Republican congressmen defeated Bush's proposal which would enact spending cuts and tax increases that would reduce the deficit by $500 billion over five years.
- The Act increased the marginal tax rate and phased out exemptions for high-income taxpayers.
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- For over 12 years it and several other organizations have been studying the effects of taxing waste.
- The conclusion is that a quarter or more of all American public revenues could be replaced if the government started taxing waste and natural resource consumption instead of revenues and income.
- A modest introductory tax placed on the burning of fossil fuels, for example, coupled with a reduction in payroll taxes, could boost America's GDP and create 1.4 million new jobs while cutting climate change pollutants by 50%.
- (Hoerner, Andrew, ‘Tax Waste not Work') The nation's economy would thus be put on a sounder footing because growth would be more sustainable, less costly, and less dependent on foreign commodities.
- Bush to enact mandatory reductions in carbon emissions to combat global climate change (their goal was to cut greenhouse gas emissions 60% by 2050).
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- (Local governments, in contrast, generally collect most of their tax revenues from property taxes.
- State governments traditionally have depended on sales and excise taxes, but state income taxes have grown more important since World War II. )
- The 1862 tax law also established the Office of the Commissioner of Internal Revenue to collect taxes and enforce tax laws either by seizing the property and income of non-payers or through prosecution.
- The Tax Reform Act of 1986, perhaps the most substantial reform of the U.S. tax system since the beginning of the income tax, reduced income tax rates while cutting back many popular income tax deductions (the home mortgage deduction and IRA deductions were preserved, however).
- The Tax Reform Act replaced the previous law's 15 tax brackets, which had a top tax rate of 50 percent, with a system that had only two tax brackets -- 15 percent and 28 percent.