“While some business tax proposals can make the economy grow faster, economists say many of the individual tax cuts being contemplated would do little to expand investment, gross domestic product or tax collections. And they caution against banking on growth fueled by tax cuts to address the nation’s fiscal challenges.”
This actually isn’t true. What it is based on is the following: in the year tax cuts occur, businesses see growth, etc. This is true.
HOWEVER, in the following year…
Everything is flat again? Why, because companies adjust to the new normal. If you recall, there was sporadic growth after Trump’s tax cuts but not SUSTAINED growth. This is the same thing we saw under Reagan. Like getting a raise, your salary goes up, you may feel better, but it quickly goes back to sameo-sameo.
In order for businesses to get juiced, you need another tax cut. You should be able to see where this is going.
The REAL solution? Higher wages for workers (which increases
2/
… expendable income.
These short-term tax cuts are bogus. They do not help the economy and reduce what Congress can spend which results in MORE borrowing.
BTW this is why REPUBLICANS increase the deficit. They want to give tax cuts but keep expenditures high. In other words they use other countries as a credit card while avoiding paying it back. That ALWAYS ends well, right?
Democrats at least WANT to pay (hence taxes). This is why NOT A SINGLE REPUBLICAN has managed to come close to…
3/
… reducing the deficit.
You can’t give tax cuts and maintain or increase spending. Yet this is the very thing Trump has promised.
If you think it will work, feel free to explain it to me.
@feloneouscat I don't think it will work. The fallacy is that the tax cuts will grow the economy so much that the reduced tax rates will still produce more revenue. This has never born out.
@00pi @feloneouscat It won't work because tax cuts only benefit the rich, not the public at large.
Conversely, the 1990s tax increases on the rich, contraey to prediction, did not tank the economy. The economy roared ahead, Wall Street soared, government debt built up by the Reagan/Bush administrations was paid down & the government had a surplus for the 1st time in its history. Dubya's response was new tax cuts, called a "refund", putting us back in debt, then 9/11 happened.
That was NOT due to tax cuts, it was due to a bubble economy created by the dot com. This bubble economy burst (and 9/11 didn’t help) putting the economy on life support up to (and through) the Great Recession. It wasn’t until Biden that actual work to improve the fundamentals (ie not depend on bubbles) happened.
Of course, Trump will break things again.
@feloneouscat @00pi