Question: For each of the following, state whether the policy would work according to the current income theory and the permanent income theory and explain why

For each of the following, state whether the policy would work according to the current income theory and the permanent income theory and explain why in detail. 

A 10-year tax cut on the personal income tax rates with reduced payroll withholding going into effect immediately.

A 10-year tax cut on corporate income tax rates.

A one-time tax rebate to everyone in the United States based on 10% of each person's prior year federal income taxes paid.

A one-time tax rebate/credit to everyone in the United States of $1,000 per person regardless of whether they had paid taxes or not.

A permanent increase of 10% in Social Security payments to all recipients.

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According to the current income theory a 10year tax cut on personal income tax rates with reduced payroll withholding going into effect immediately would likely increase consumption in the short run T... View full answer

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