Give a rebuttal on the point that reducing tax can boost savings and investments

Answer 1

While reducing taxes can potentially leave individuals and businesses with more disposable income, it does not guarantee that they will automatically choose to save or invest that extra money. People may choose to spend the extra money on consumption or pay off debts rather than save or invest it. Additionally, reducing taxes may lead to a decrease in government revenue, potentially resulting in cuts to important public services and resources that can also impact the overall economy. Ultimately, the impact of reducing taxes on savings and investments is not a guaranteed outcome and must be considered within the broader economic context.