Question

Using economic policies, how can Minnesota lower its taxes and cost of education? What outcomes are you anticipating from your solution? Please justify and defend your answer based on economic facts, laws, theories and principles

Answer 1

New business creation are of vital economic importance. They create many new jobs. The corporate taxes reduce the amount of money businesses have to invest. High rate of corporate tax results in the availability of low capital per worker . The workers will become less productive .Continuous economic growth require workers to be more productive . With high tax rate this is impossible.

Trickle down theory states that the tax cuts and benefits for the corporations and the wealthy will trickle down to everyone. The financial benefits to investors to stimulate economic growth.

The later curve , which is a bell shaped curve also suggests tax rates to be less to produce maximum revenue

Minnesota can lower the cost of education by policies that strengthen and stabilise the funding for state universities and colleges. Another measure is to provide greater financial support to deserving students.

The graduation rates from its public colleges and institutions are still low to meet the future demand of the state 's labour market. This will reduce the state 's competitiveness and will threaten the future of its young people .

The choice of monetary and fiscal policies depicts the role of government to economic growth Wagner's law advocates increase in state activities . According to Wagner's law the government need to provide cultural and welfare services like education, public health , environmental protection etc . This boosts the economic growth .