Why the effect of tax cuts depends on who receives them

Reference no: EM131098431

Use the following news clip and fact to work Problems 9 to 11. Senate Approves Obama Tax Cut Plan The U.S. Senate has passed legislation to extend the Bush-era tax cuts for high-income earners to middle-class Americans earning up to $250,000 per year. Source: Financial Times, July 26, 2012. Fact: Middle and low-income earners spend almost all their disposable incomes. High-income earners save a significant part of their disposable incomes. Explain the intended effect of extending tax cuts to middle-class Americans but not for high-income families. Draw a graph to illustrate the intended effect. Explain why the effect of tax cuts depends on who receives them.

Reference no: EM131098431

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