In a previous article, we looked at three policy areas ripe for large “positive supply shocks” and a rapid return of the U.S. economy to a high-growth, low-inflation situation: Energy production, tax cuts, and regulations.
First, Americans could see a significant reduction in energy costs under Trump’s “drill, baby, drill” plan designed to unleash American “energy dominance.” Next, we turn to phase two of Trump’s supply-side suite, the tried-and-true tool of widespread tax reductions.
Tax Cuts
To frame our discussion of supply-side tax cuts, let’s briefly review the “determinants of supply” — factors that can shift a product’s supply curve, summarized by the acronym TTEP#: Technology, Taxes, Expectations, Price of resources, # of producers.
The area where government can have a large and sudden impact should be screamingly obvious: taxes.
Yes, taxes are needed to…
