What, according to Lynch, are the major arguments for and against cutting taxes to promote economic development?

Overview

A tax refers to a monetary charge or levy that is imposed to an individual or legal entity by a government or state in for it to run the affairs smoothly . Taxes may either be direct or indirect and could be paid in money or labor equivalent . Taxes are enforced contribution in line with legislative authority

Tax policies are commonly used by a state to create jobs and to bring about economic growth . Taxes are important part of costs in any firm and any improvement in production depends on the level

of taxes and the tax incentives offered . However the tax may have insignificant effect on the profit of the firm in that a firm is faced with more and significant costs other than the tax . Tax becomes insignificant when is compared to location specific costs and other varied location factors like qualified workers , proximity to customers and quality public services because they can be more crucial than taxes . The presence of these crucial location factors depends almost entirely on each state and locality 's commitment to public investment and their ability to pay them Robert (2004

Public investment can have major positive effect in that it helps in lowering the costs of production of a firm . For tax cuts and incentives to have positive effects to a business it depends on how the firm will react to the above location factors . Taxes if increased are believed to stimulate economic development and employment growth that is , when the...