Near-term policy
How might expectations of a near-term policy reversal weaken fiscal policy depend on changes in tax rates?
Expert
A reduction in tax rates might be enacted to stimulate consumer spending. If households attain the tax cut but expect it to be reversed in the near future, they might hesitate to rise their spending. Believing that tax rates will increase again (and possibly concerned that they will rise to rates higher than before the tax cut), households may instead save their added after-tax income in anticipation of requiring to pay taxes in the future.
Fiscal Impact Analysis: Usually refers to a section of an analysis (example, bill analysis) which recognizes the costs and revenue impact of a proposal and, to the level possible, a particular numeric estimate for appropriate fiscal years.
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Bill: It is a draft of proposed law represented to the Legislature for performance. (A bill has bigger legal formality and standing than a resolution.) OR An invoice, or document statement, of an amount owing for s
Department: The governmental organization, generally belonging to the third level of the state organizational hierarchy as stated in the Uniform Codes Manual.
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