the gov. cuts business and personal income taxes and increases its own spending?expansionary,or contractionary

Public Comments

1. Not enough information. personal/business taxes can decrease - but if the amount taxed increases - the rate can decrease yet total income increase. for example - if you make $100,000 and are taxed at a rate of 15% - the government can reduce your rate to 14% in year 2 if you make $120,000 - netting the government more money. the theory is if you tax less, more money goes into the economy increasing the amount of money to be taxed at a different level. In general your scenario would by expansionary. Also pay attention to deficit spending - which our government happily engages in. I view deficit spending as a tax of the worst kind - a tax on future generations.