Question

What effects did the tax cuts of 2003 have?

Answer 1

They caused the government to have a bigger deficit.

Answer: Option B.

Explanation:

Congress instituted significant tax reductions in 2001, 2002, and 2003. The demonstrations diminished negligible personal assessment rates; decreased charges on wedded couples, profits, capital additions, and on domains and endowments; expanded the youngster charge credit; and quickened devaluation for business speculation.

A 2006 Treasury Department study evaluated that the Bush tax breaks decreased income by around 1.5% GDP on normal for every one of the initial four years of their usage, a roughly 6% yearly decrease in income comparative with a pattern without those tax reductions.

Answer 2

Answer:

B. They caused the government to have a bigger deficit.

Explanation:

The Congress passed the JGTRRA - U.S. tax cuts into law on May 23, 2003, which reduced the tax rate on corporate dividends to 15%. Most families  and business investors benefited from the tax cuts. The essence of the cut was to have beneficial effects on investment, because it was majorly on dividend and capital gains tax cuts.

Research latter proves that the fiscal policy adds $5.6 trillion to deficits from 2001 to 2018. Thus, government was made to record a bigger deficit. A fiscal policy is a government's decisions regarding spending and taxing.