What does supply-side economics advocate for?

Supply-side economics advocates for lowering taxes as a means to stimulate production and economic growth. The theory posits that when taxes are reduced, individuals and businesses have more disposable income to invest in expansion, hire more employees, and engage in consumer spending. This increased economic activity can lead to higher overall output and ultimately, greater tax revenues despite the lower rates. The belief is that by incentivizing production through tax cuts, the economy can grow more robustly, leading to job creation and increased wealth.

In contrast, higher taxes typically discourage investment and can limit economic growth, while regulations can often add burdens that hamper business expansion. Similarly, while increased government spending might provide a short-term boost to demand, supply-side economics emphasizes the role of production and supply in driving long-term economic success.