Putting economic theory to the test: Cutting local taxes cuts household income

Voters might think less taxes would equate to more money in their pockets, but a new study shows that at the local level, the opposite may actually be true. Economists and politicians have weighed the benefits of different theoretical models for years, but a lack of direct, empirical evidence showing the macroeconomic effects of fiscal policy has made it difficult to argue for or against government funding at the local level.

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