Are Tax Cuts Beneficial For Improving Economy?

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Are Tax Cuts Beneficial for improving an Economy especially after a Recession? Argue and Defend Your Point. Recessions in any country can present the most difficult economic challenges to the authorities as they seek the best methods to regain their economic power. There are different avenues they can attempt to alleviate the issue including the reduction of government spending and tax cuts for the citizens and businesses . The concern for this investigation is the ability of tax cuts to increase the economic stimulus in that period. The review will focus on how the strategy can benefit the citizens and enable the country to restore itself from the financial difficulties over that time. There are different outcomes the country should…show more content…
The recovery of the taxes to the nation’s budget may take time, but it helps them maneuver out of the economic recession. The first benefit that a tax cut will bring is the encouragement of efficiency in the private businesses . It provides an opportunity for investors to inject money into the economy since it has the potential for growth, and they do not incur as many costs for running the investments. The tax cuts also reduce the amount of risk that the companies will have to indulge in to enable them to make a profit. With a high cost of transactions due to the taxes, the corporations will have to spend more on acquiring and paying credits and that increase the amount of risk for their operations. That move will spur their investment ventures and promises quicker growth than other avenues of alleviating the recession. The move also reduces the possibility for the larger organizations to indulge in acquisitions and mergers with the smaller business that may eventually lead to monopolies. It is hard to control most market factors in an environment whose operations have a saturation of monopolistic participants; therefore, it is not economically healthy. A reduction in the taxes will encourage all forms of business participation. The cut will provide an excellent opportunity for the small enterprises to withstand the difficulties of the recession. That will prevent the possibility of the larger corporations turning into oligopolies and eventually monopolies that are
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