USA HISTORY

Detailed explanation-1: -The administration of Republican president Ronald Reagan promoted its fiscal policies as being based on supply-side economics. Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates.

Detailed explanation-2: -As inflation pushed numerous taxpayers into higher and higher marginal tax brackets, supply-side economists argued that high taxes were a major drag on economic growth. Furthermore, according to the supply-side view, the top rates could be reduced without a significant loss in revenue.