ECO100: Survey of Contemporary Economic Issues
What happens when government raises and lowers taxes? In this paper I will explain how this affects the average taxpayer, along with how it effects personal income , GDP, economy and if taxes should be raised. Taxes whether it be lowered or higher affects someone in the long run. For example if you increase taxes on certain incomes would affect the one who make more money versus the middle class.
When it comes to taxes our government has varies things they have to decide. Depending on how high or low taxes are depends on how willing on would be to work hard. For example if you knew that taxes were going to be lower you would be more willing to work because this would help you save money or have more money for items you might not necessarily need. But if your taxes were really high like 75% you would probably not be so willing because you would be working only to pay taxes.
If the government were to lower taxes this would affect our economy because consumers would be more willing to spend and also have it to spend. With lowering taxes this could increase production on certain items due to people being able to spend more. Lowering taxes on certain things such as income and capital gains is a good way to increase economic growth. It could also increase government revenues due to economy growing enough to offset lower rate. This could also increase the unemployment rate if consumers are buying more goods then this leads to more production and may also allow employers what they need to hire more people.
If the government were to raise taxes this would result in additional revenue to pay for public programs and services. There would be more money available for Medicare, Social Security, help with building state roads and interstate highways. All these things are funded by taxpayers. There are not many people who...