According to supply-side economists, the growth of the U.S. economy in the 1980s can be attributed to lower marginal tax rates, which improved the incentives for people to work.
What is supply-side economics?
Another term for the study of how changes in marginal tax rates affect economic activity is "supply-side economics." High marginal tax rates, in the opinion of supply-side economists, severely deter income, productivity, and resource usage efficiency.
Who benefits from supply-side economics?
Reduced income taxes and marginal tax rates are preferred by supply-side economics to motivate workers to put in additional hours at the office. According to this view, capital gains taxes should be reduced to encourage business owners and investors to invest their profits in the economy.
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