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Supply-side policies can face problems related to disagreements on effects of tax cuts, controversy around supply-side economics, and contention on promoting long-term growth.
Supply-side policies can face several problems. One issue is the disagreements on the magnitude of the effects of tax cuts on labor supply. While most economists agree that tax cuts can increase labor supply, some proponents suggest that revenue might actually increase due to this effect. Another problem lies in the controversy surrounding supply-side economics, with critics labeling it as 'trickle-down economics.' Additionally, there can be contention on whether fiscal policies should focus on promoting long-term growth through measures like reducing tax rates or providing investment tax credits.
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