The theory that lowering tax rates will increase economic growth and tax collections. Specifically, tax cuts allow entrepreneurs to invest their tax savings in new jobs and equipment, causing more people to earn more money, who collectively pay more taxes, albeit at lower individual rates. The Laffer Curve was an attempt to graph such a relationship between tax rates and tax collections. To critics in the early 80s who said that tax cuts without spending cuts would increase the deficit, supply-siders claimed that growth would be so tremendous that the economy would simply outgrow the deficit. Early supply-side economists also believed in Say's Law ("Supply creates its own demand"), hence the name, supply-side economics.
A theory of economics that reductions in tax rates will stimulate investment and in turn will benefit the entire society.
The theory that reduced taxation and government regulation will stimulate investment and spur economic growth.
School of thought which holds that taxes affect incentives to work, save, invest, and take risks.
An economic theory which holds that reducing tax rates, especially for businesses and wealthy individuals, stimulates savings and investment for the benefit of everyone. also called trickle-down economics. see also Keynesian Economics.
the school of economic theory that stresses the costs of production as a means of stimulating the economy; advocates policies that raise capital and labor output by increasing the incentive to produce
This is the belief that prosperity depends on increasing the supply of goods and services rather than on stimulating demand. Reaganomics sought to do so by lowering taxes on producers like high-salaried owners and managers. Critics of supply-side economics pointed to the similarity between its ideas and the fallacy of Say's law, which states that supply creates its own demand.
Focus on the effects of national output potential or supply through reduction of taxes and government regulation for businesses designed to increase productivity and economic growth.
The theory of supply-side economics claims that tax cuts leave people with more money, and that they will invest some of that money rather than spend it all on consumer goods. These investments will stimulate economic growth and, ultimately, produce more revenue for the government despite the lower tax rates. This is historically related to the "trickle-down" theory.
Supply-side economics is a school of macroeconomic thought which emphasizes the "supply" part of supply and demand. The central concept of supply-side economics is Say's Law: "supply creates its own demand," the idea that one must sell before one can afford to buy. Therefore good economic policy encourages increased production, versus attempts to stimulate demand — this is the fundamental dispute between classical, supply-side economics and Keynesian economics or demand side economics.