The Economic Effect Of Tax Rate Cuts

This creates a budget deficit because there is more being spent than what’s being brought it.

"They discounted a lot of positive growth effects of tax reform package," Huffman said of the recent analysis. "That's one government analysis, granted what some folks would call 'mainstream.' History proves that tax reform — tax cuts specifically — they grow the federal revenue. Why? Businesses make more money and people have larger paychecks and they are putting more into the economy."

The debates on tax cuts are making their way to headlines of every radio station, newspaper, and television station in America. Today, tax cuts would only benefit the wealthy and wouldn’t really benefit the lower class. “The administration and it’s congressional alleys are proposing to sharply reduce taxation of the business income primarily benefiting

The author’s title is “Economist have no use for republican tax cuts.” but could tax cuts benefit the United States Economy. If taxes are low for the wealthier especially business tax it could provide incentive for companies considering going overseas to stay. If these companies do chose to stay this would provide employment for many American’s, the companies would also be buying land which would also benefit the economy. Both tax cuts and tax increases could benefit or damage the Economy. One Article stated “‘The trade deficit with China eliminated or displaced more than 2.7 million U.S. jobs, over 2.1 million in manufacturing.’” Acknowledging that 2001-2011 is Bush and Obama era’s it can be understood that there are more factors to job loss rather than just taxes, because obama increased taxes while, bush cut them. With that being said it can be assumed that companies will go overseas regardless of most tax policies. Although If a large enough tax cut is provided maybe some companies will remain in the U.S.

The United States deficit, surplus, and debt will always have an impact on taxpayers. In the state of high deficit the government seeks ways to cut and save money for debt payment. The government does this by pulling funding from programs that have little government impact. Increasing taxes also supplies the government with extra income. In addition to the reduction or elimination of certain tax credits, the government analyzes school funding for cost effectiveness. Each step the government takes has a trickling effect on taxpayer’s dollar.

a greater percent in taxes and tax revenue rather than just shoveling the money into things such as

More savings will thus reduce that rate and so presumably spur more entrepreneurship and so on” (Worstall). Worstall proves not only is non-taxed income possible but it can be done over time. Tami Luhby, senior writer for CNN Money, interviewed Gerald Friedman from the Economics Department at the University of Massachusetts Amherst. Friedman mentions that Bernie Sanders helped him do an experiment which worked. Friedman, however, argues that “Sanders ' plan would be more stimulative because it is pouring money [$1 trillion on infrastructure] into the economy, as opposed to cutting taxes… (Luhby). The thinking goes: This enhanced government spending would increase demand on businesses, who would then hire more workers to meet their needs. The increase in employment will prompt people to buy more, leading other businesses to hire. If there is more spending, people will have more to do, Friedman said, noting that the share of the population with jobs could be restored to its 1999 level of more than 64%, up from its current 59.6% rate” (Luhby). Mr. Sander’s plan is similar to our current President Barack Obama’s plan. He poured money into the economy but it was by artificially inflating the Stock Market and economy. We still have high unemployment and now an additional $10.6 trillion in national debt. (Sargent)

that if you do cut taxes for the rich, it will allow them to spend more in which will funds the

However, raising taxes on the rich and corporations is not as helpful to our economy as most people think. Although raising taxes on the top percent of people and companies appears to create more income for the government, the result will make it harder for middle class and lower class citizens to grow. Some argue that by combining several key changes, including the simplification of the tax code to avoid loopholes and the decrease of taxes on the rich and corporations, there will be an improvement in the national economy. Although this may seem a bit counterintuitive, it makes more sense when looked at closely. By lower taxes and remove all loopholes, smaller businesses are given further opportunities to grow instead of facing financial roadblocks and government

The tax cuts from 2001 and 2003 reduced the top four marginal income tax rates. The 2001 tax cuts did accomplish their intended goals, Republicans and Democrats tend to differ when it comes to tax cut benefits, I agree with the average democrat approach towards stimulating economic growth.

When president Obama came into office he inherited an approximately $1.3 trillion in debt when he entered and approximately $8 Trillion over the next decade (politifact.org). Think about this, when Bush took office in 2001, he inherited a budget surplus of $236 billion from Clinton (Factcheck.org). That means that Bush loss approximately $1.5 trillion in a period of 8 years. This is after the tax cuts of 2001. Time and time again it has been proven that statements about tax cuts increase federal income is empirically not true. An article written in the Daily Reckoning, it talks about the former White House budget director David Stockman’s opinion on the Trump tax cuts. In the article it quoted David Stockman saying in an interview on Fox and Friends saying on the Reagan tax cuts,”… Those tax cuts didn’t pay for themselves. It started us down the road to the $20 trillion we have today.” This is a former republican lawmaker and a member of the Reagan administration, the administration in which every pro supply-argument cites. As it states and I have previously stated tax cuts just

Mostly from the spending money of middle-class consumers. And where does the spending money of middle-class consumers come from? From middle-class incomes”(Ettlinger). Tax cuts would raise income levels, if these tax cuts were focused on the middle class, they would have more money available to spend. If the middle class had more money available to spend, it would add money into the economy and create jobs thus expanding the tax base which would bring in more revenue for the government and help citizens. Another simple fix to the federal tax plan would be to slightly raise the corporate tax rate. The corporate tax rate should be kept at a low level, as it gives businesses more money with which to raise their employees’ incomes and to create new jobs. However, raising it slightly would allow the government to bring in more revenue, “And with each percentage point reduction in the corporate rate representing $100 billion in revenue over a decade, a move to a 22.5% rate would generate another $250 billion in revenue while still substantially leveling the global playing field for U.S.

By eliminating tax breaks for large corporations, repealing the excise tax on high-cost health insurance, and providing tax relief for middle-class families; the Democratic party hopes to boost the United States’ economy. They believe that increasing taxes on the upper-class and reducing taxes on the middle-class will allow citizens of the middle-class to have more money. This will also allow businesses to continue making money while paying their fair share of

This may sound like a tax plan that will relieve the financial burden on lower-income taxpayers, directly benefiting the poor, but in actuality, cutting taxes for all in a regressive manner gives substantially more money to the wealthiest taxpayers and a very small amount to lower income taxpayers. According to his plan, a typical American family of four will be able to keep at least $1, 600 more of

| Critics of spending hikes argue that tax cuts can expand both aggregate demand and aggregate supply and that hasty increases in government spending may lead to wasteful public projects.Tax cuts increase aggregate demand by increasing household’s disposable income, as