NBC: Tax cuts don't spur economic growth

mentalfloss

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
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Republicans don't understand: Tax cuts don't spur economic growth

In decades past, there was bipartisan support for policies that laid the basis for a long period of broadly shared prosperity. Unfortunately, this consensus seems to have been replaced by the narrow-minded greed of the very rich and, insofar as they can continue to get their way, the story is not likely to end well.

Take, for instance, the Republican tax plan, which passed in December and contained a potpourri of tax breaks for special interest groups and high-income households. Its centerpiece was a large cut in the corporate income tax; the plan lowered the rate from 35 percent to 21 percent.

The Trump administration claimed that this cut, coupled with various sweeteners like full expensing of new investments, would set off an investment boom. According to the administration, U.S. companies would bring back factories from overseas and foreign companies would rush to take advantage of low U.S. taxes, and this surge in investment would lead to more jobs and higher productivity growth, eventually translating into higher wages for workers.

It’s a nice story, but there is little reason to believe that things will pan out as advertised.

Republicans don't understand: Tax cuts don't spur economic growth
 
White_Unifier

White_Unifier

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Too simplistic. Cut taxes to zero, society collapses. raise taxes to 100%, society collapses. There exists an optimum tax rate. It's a matter of finding that optimum rate.
 
Danbones

Danbones

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Funny, the US just had tax cuts, record tax collections, record employment ( especially amoungst some minorities) and GDP appears to be on the RISE
;)
So, this is just another fake nudes thread.. no naked truth exposed here.
 
White_Unifier

White_Unifier

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Danbones said:
Funny, the US just had tax cuts, record tax collections, record employment ( especially amoungst some minorities) and GDP appears to be on the RISE
;)
So, this is just another fake nudes thread.. no naked truth exposed here.
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Mostly debt-driven though.
 
White_Unifier

White_Unifier

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Cannuck said:
Trumpites love debt
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Debt makes the economy look good in the short term. If the government plays its debt cards right, it can lower taxes, increase spending, keep inflation down, and create full employment in the short term with only high interest rates and growing debt as a side effect. As the debt grows, they can just pass the mess on to their successor.
 
Cannuck

Cannuck

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White_Unifier said:
Debt makes the economy look good in the short term. If the government plays its debt cards right, it can lower taxes, increase spending, keep inflation down, and create full employment in the short term with only high interest rates and growing debt as a side effect. As the debt grows, they can just pass the mess on to their successor.
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That's exactly what our senior population did. Now they still think we owe them something.
 
Cannuck

Cannuck

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White_Unifier said:
Unfortunately, our younger population is just as bad across all generations.
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I don't see it that way at all. Most people I know under 30 (that are in the workforce) want lower taxes and less government. The seniors and students are the ones demanding services. Both are on the government tit.
 
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White_Unifier

White_Unifier

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Cannuck said:
I don't see it that way at all. Most people I know under 30 (that are in the workforce) want lower taxes and less government. The seniors are the ones demanding services.
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But what's the proportion? Some people I know favour reducing spending, but they still see lowering taxes as conditional on lowering the debt. Other people I know, though they want to reduce spending, also want to cut taxes independently of that and so would support lowering taxes even at the expense of the debt. I haven't counted heads though so i couldn't say who's in the majority between these.
 
Cannuck

Cannuck

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White_Unifier said:
But what's the proportion? Some people I know favour reducing spending, but they still see lowering taxes as conditional on lowering the debt. Other people I know, though they want to reduce spending, also want to cut taxes independently of that and so would support lowering taxes even at the expense of the debt. I haven't counted heads though so i couldn't say who's in the majority between these.
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People at the trough want the services. People filling the trough want fewer services.
 
White_Unifier

White_Unifier

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Cannuck said:
People at the trough want the services. People filling the trough want fewer services.
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Not all of the money goes to serving us. Much of it goes to servicing the debt. This means that when lowering taxes, we need to consider not only the cost of services but the cost of interest on debt too.
 
Durry

Durry

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White_Unifier said:
Not all of the money goes to serving us. Much of it goes to servicing the debt. This means that when lowering taxes, we need to consider not only the cost of services but the cost of interest on debt too.
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It's a good thing that you told us, without your knowledge of economics we would never have known this???
 
White_Unifier

White_Unifier

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Durry said:
It's a good thing that you told us, without your knowledge of economics we would never have known this???
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Unfortunately many Canadians support cutting taxes come hell or high waters. Yes, I favour lowering taxes in principle, but only conditionally on paying the debt.
 
Durry

Durry

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White_Unifier said:
Unfortunately many Canadians support cutting taxes come hell or high waters. Yes, I favour lowering taxes in principle, but only conditionally on paying the debt.
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And conditional on providing basic government services so that the country doesn't stop operating.
 
White_Unifier

White_Unifier

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Tecumsehsbones said:
Lest you become like the U.S. Debt at 100% of GDP.

And rising.
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That's one way to spend on national defense. A strong military as a first line of defense so the enemy would struggle to overpower you. High debt and bankruptcy as a second line of defense so even if the enemy could overpower you, it wouldn't want to touch your social and economic problems with a ten-foot pole.

Unfortunately, Canada'd debt is growing by leaps and bounds too.

Durry said:
And conditional on providing basic government services so that the country doesn't stop operating.
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And that too yes. That's why I tend to favour politicians that promise reducing government spending but tend to shy away from those who promise to cut taxes. I'd prefer those who expressed a desire to cut taxes as an aspirational goal, not a promise set in stone.
 
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