Question: Taxes

1. Explain in your own words what "fiscal drag" and Deadweight loss is.
2. In your own words explain what Laffer curve illustrates. Additionally, explain why cutting taxes will not necessarily increase government revenue? Explain why increasing taxes will also not necessarily increase government revenue.
3. What are the other options for reducing government deficit? If you were running for a president, how would you deal with our country’s increasing debt? Explain.
4. In the 2012 Budget, the US government’s tax revenues were estimated to be $2.627 trillion and government spending was estimated to be $3.729 trillion. Calculate the2012 estimated budget deficit or surplus. Explain what your answer means

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