The Economic Effect Of Tax Rate Cuts

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

12. The benefit of what I propose is that the government wouldn’t spend that much and inflation would decrease which would also decrease unemployment.

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

CHARLESTON, W.Va. — For Jason Huffman, state director of the West Virginia chapter of Americans for Prosperity, the congressional efforts to pass tax legislation is an opportunity to spur economic growth. "This is a huge step for taxpayers. This is going to make American businesses competitive again, it's going to put

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)

market crash in 1987. Regan’s Economical Viewpoints are still recognized today. Many believe that if you do cut taxes for the rich, it will allow them to spend more in which will funds the

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

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.

Government tax cuts and taxation on the middle class always seems to be the debate in every election year in the U.S. This debate is always related to the federal deficit and our national debt. The pro side of the argument is that if you cut taxes the revenue generated for the government will fall and it will then expand national debt. But in the counter arguments on cutting taxes can stimulate the economy, leading to an increase in government revenue with the redux in tax rates. According to Forbes article “Do Tax Cuts Increase Government Revenue?” “Using the data from 1913 through the end of 2011, the correlation between the maximum marginal income tax bracket and total Federal receipts is a negative 0.50. In simple terms, when taxes are cut, Federal revenue has a very strong tendency to rise! And when taxes are raised, government revenue has a strong tendency to fall.” ("Forbes Welcome", 2016). I believe the tax cuts proposed to the 95% of the country will have the intended a stimulus effect on economic consumer spending which leads to an increase in government revenues and eventually work its way down to a rise in the real GDP. The tax cut policy should generate revenue and show positive results in Home Depot’s financial gains. I believe the lowering of the tax rates will increase disposable income, and boost consumer spending, directly again home depot and the economic growth and it should succeed in its intended goal of creating a higher standard of living.

Conservative vs. Liberal Ideology As with any government program, the type of tax imposed on the taxpayers depends on the political group currently controlling the government. With a republican president in office, we are seeing the effects of the conservative philosophy: cut taxes and limit government involvement, thereby decreasing poverty by stimulating economic growth. Earlier in his term, President George W. Bush passed a major tax cut with this rational guiding his tax policy:

A decrease in spending is not the only thing that the government would have to look forward to, too. Legalized weed would become a potential revenue opportunity for whatever government body exists over it. In the case of Prop 19, the proposition states that “Appropriate taxes or fees” could be

In contrast, that they would raise interest rates and thereby reduce output in both the short run and the long run. GDP (Gross Domestic Product) is commonly used as an indicator of a nation's wealth, it also directly affected by federal taxes. Consumer spending typically stand for most parts of GNP. As we would expect, lowering taxes raise family income, promoting the consumer to spend their additional sums, thereby, enhancing GDP (GDP = C + I + G + NX).Since less money paid to the tax authority means more money in pockets of consumers, reducing taxes, therefore, shift right the aggregate demand curve as consumers demand more goods and services with their higher incomes. As shown in Figure 2, if tax cuts succeed in increasing economic growth, in this simple sense, the cuts will shift both aggregate demand (AD) and aggregate supply (AS) because the price level for a supply of goods will be reduced, which often leads to an increase in demand for those goods, as demands of consumers are met by suppliers.

Whether a Cut in Corp Tax Rate be Beneficial Doesn’t everyone want to keep what he/she has earned? It has always been somewhat tradition for Americans to work hard for their money, only to see some of it squandered away come tax time. Wouldn’t a tax cut, for some, be like a divine, heavenly grace? As the year 2001 unfolds and George W. Bush begins his presidency, income tax rates have, in fact, become a concern. President Bush is pushing for an income tax bill that will reduce the tax brackets from 15%, 28%, 31%, 36%, and 39.6% to a new bracket in 2006 of 10%, 15%, 25%, and 33%. A cut in individual income taxes would benefit most Americans and is well deserved. However, there is no plan to cut the corporate tax rates yet. A

The immediate effect of a budget deficit is the negative perception of the general public, both local and international, on the ability of government to manage its fiscal affairs which seriously impairs its financial and credit rating including its ability to borrow more money to service the country’s foreign debt.