ECONOMIC GROWTH
I think option (b) is the best among the three effective for increasing the growth rate of the economy in the USA. There are effects of reducing the income tax in both the short and the long-run. The following essay will analyze the impact of both periods.
Short-run result
A reduction of the income tax leads to employers forcing people to work for long hours. People working for long hours to earn their income means that the gross domestic product is reducing (Pechman, 2015).
Long-run effects
Following the principles of having an increasing economic growth rate, facing a balanced transaction by the government is quite essential. This option allows the government to achieve this requirement whereby there are no losses realized from the collection of income taxes concerning the asked state sales taxes (Ojede, & Yamarik, 2016).
Secondly, a reduction in the income tax maintains the gross income high. When the total income tax is high means that the taxpayers will have extra money to buy and purchase goods. Besides, sales demand will increase. The federal government intern gets income through the state sales taxes taxed from these transactions. The gross domestic product will, therefore, increase with the increase in sales demand due to the sales tax levied on transactions between buyers and sellers. Thus, an increasing gross domestic product of the USA is a replica of a rising economic growth rate.