Question

Use your knowledge about economic concepts and information from the video you just watched to answer the following: In the video, what tax cut is President Obama extending?

a) Corporate tax reduction
b) Capital gains tax cut
c) Payroll tax cut
d) Income tax credit extension

Answer 1

President Obama considered extending the Bush-era tax cuts, which primarily focused on income tax credit extensions and could potentially boost consumer spending and GDP.

Step-by-step explanation:

Based on the provided reference information, in the summer of 2010, President Obama was considering extending a tax cut initiated by President George W. Bush. The George W. Bush tax cuts were set to expire, which would lead to a change in tax rates if they were not renewed.

While the specific tax cut that President Obama was extending is not directly stated in the given information, during his administration around that time, Obama did extend the Bush tax cuts which were primarily income tax credit extensions.

These cuts included reductions in the income tax rates for individuals across various brackets. A tax cut on income typically can provide a boost to consumer spending and potentially increase GDP, as posited by the advisors during the Kennedy administration.