Tax Cuts: A Remedy for Inflation

Publication Date: May 1981

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Peter G. Germanis

Research Area: Banking and finance

Keywords: Taxes

Type: Report

Abstract:

President Reagan's proposal to reduce federal income tax rates 30 percent over three years has sparked a sharp controversy. Proponents of the tax proposal assert that a reduction of marginal tax rates would revitalize the economy by producing non-inflationary economic growth. Critics of the plan, on the other hand, contend that such a policy would serve only to exacerbate inflationary pressures within the economy.