Asia vacation packages for In the UNITED STATES, supply-side economics emerged in the 1970s as an alternative to Keynesian demand-management policies and reached its maximum impact in the 1980s, during the presidency of Ronald REAGAN (Reaganomics). By emphasizing relative price changes rather than income changes, fiscal policy is again seen as the pivot for achieving economic growth. At the core of supply-side economics lies the conviction that by lowering the marginal tax rate, government can provide consumers with incentives to substitute work for leisure, since the substitution effect would dominate the income effect. Contrary to Keynes’ assumption that tax reductions would boost aggregate demand and fan inflation, the theory expects these incentives to shift the aggregate supply curve. Supply-side economists assume that marginal tax rates enter directly into the costs of capital and thus influence investment decisions. Excessive rates (and government regulation) not only crowd out investment, they also lead to decreasing fiscal revenue. This expectation relies on the LAFFER CURVE model, which predicts that the relationship between the marginal tax rate and fiscal revenue has the shape of an inverted U: Increasing the rate produces more revenue only up to a certain optimal threshold beyond which any further increase will actually decrease revenue, as avoidance and evasion will start to predominate. Asia vacation packages 2016.