THE IMPACT OF TAX CUTS ON ECONOMIC GROWTH: A COMPARATIVE LEGAL ANALYSIS

Abstract

Corporate businesses and entrepreneurs have always desired and even demanded tax cuts for business sustainability. Consequently, this study investigates the impact of tax cuts on economic growth, comparing the effects of reductions in income tax rates and corporate tax rates on GDP growth, employment, and investment. The study adopts both Qualitative and Quantitative Research Approach. Deploying the Comparative Case Studies, it compares the economic growth of developing and developed countries or states with different tax policies to identify the impact of tax cuts. A comprehensive review of existing literature and empirical analysis of data from various countries reveals that tax cuts can stimulate economic growth, but their effectiveness depends on the type of tax cut, economic conditions, and implementation. The findings suggest that targeted tax cuts, such as reducing income tax rates for low- and middle-income households, can have a more significant positive impact on economic growth than broad-based corporate tax cuts.