GOVERNMENT POLICIES

How Government Policies Can Be Used To Reduce The Budget Deficit?

Government Policies

Reducing government spending would reduce the budget deficit. Increased tax revenue will reduce the budget deficit. Often, reducing marginal tax rates can increase the amount of taxes collected - as it was when the capital gains and dividend rates were lowered in 2003.

Measures adopted by governments to stabilize the economy, in particular, by regulating the levels and allocations of taxes and government spending. When the economy is sluggish, the government can cut taxes, leaving taxpayers extra cash to spend, and thus increase consumption. The increase in public works ...