Cut in taxes (3)
I believe the answer is:
axe
'cut' is the definition.
(both can mean to cancel or remove)
'in taxes' is the wordplay.
'in' says the answer is hidden in the clue.
'AXE' is hidden within 'taxes'.
(Other definitions for axe that I've seen before include "Cancel" , "Terminate - with a hatchet?" , "can bring down plane" , "US jazz instrument" , "Terminate; chopper" .)