# linear cut

## Definition

### Economics

- A reduction in tariffs in which the size of the reduction is linearly related to the initial size of the tariff: %D
*t*=*a*+*bt*, where %D*t*is the percent reduction in the tariff,*t*is the initial tariff, and*a*,*b*are constants. The simplest linear cut reduces all tariffs by the same percentage.. Contrasts with the Swiss Formula.