Introduction Governments get the greatest percentage of their income from taxes paid by tax payers in any given country. Taxation is a policy whereby citizens or residents of a country contribute money for social services to the government through well coordinated guidelines. Different countries have different taxation laws. Taxation is a way through which resources are distributed from the haves to the have-nots. During campaigns of 2008, Senator John McCain’s promised to reduce taxes as a way of reviving the economy; but the question is how the economy will grow if the government has no money? No one likes paying taxes; however it is an evil that we have to live (Anon, 2009). People, if asked, would opt to pay the lowest taxes ever but surprisingly enough they will demand more services from the government. The notion that was set that taxes should be reduced is welcomed by many citizens; they are of the opinion that it will have a direct benefit on them since disposable income will increase (Klieth, David & Lawrence, 2008). This is true; however there are dangers that will accompany the move. This paper will discuss how tax cuts can revive an economy. Tax cuts Different countries adopt different taxation policies, however tax cut take the same route; it can result from raising the minimum amount that is taxable in an economy, reducing the percentage of taxation or even eliminating the entire amount of taxes. Some countries offer tax credits and remission to areas that they would like to give this percentage. There are some cuts which are meant to cut across the entire economy and some are on a specific industry. Whichever the method, the end result is a reduced tax payable from the trader, individual or company. Governments play an important role in controlling how their country’s economy fair. In a broader perspective, they use monetary and fiscal policies for contraction or expansion reasons. When regulations are made, they may hurt or benefit the economy in short term and long term. Tax cut is an expansionary fiscal policy adopted with the aim of reviving an economy. Past history There has been three times that tax cuts have been implemented by the government to facilitate economic growth, in all the phases there has been success. In 1920’s, there was the Harding/Coolidge cuts, then in 1960’s there was president Kennedy cuts, and the Reagan cuts of the 1980s. All the three cuts have proved to be successful. They have followed the same trends that facilitated revival of economies by ensuring that people are given a reason to invest and spend in their economy. Let’s analyze how they manage to revive the economy; Increased disposable income Income tax is tax that is charged on individuals and companies out of the money that they get in a certain period of time. In United States of America taxation laws, individuals use a graduated scale of taxation. This is a case where there is set percentages payable depending on the income that one gets. It ensures that those people who earn higher pay more taxes. When it comes to taxes, it is a standard percentage, unless a particular company is enjoying a certain benefit. Before the taxable value is reached, there are some allowable and disallowable which are adjusted in the profit. In case