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Cutey with a booty

Tax cut to cure economy? How will tax cut help u if u don't have a job?

Trying to understand the tax cut approach. As economy continues to lose jobs, how will tax cut help those who have lost their jobs? No job means no taxes so how can that help?
Stephanie:

business expands, hire more people. If there isn't a tax cut then there will be cut backs and layoffs. A stimulus may also cause us to go further into recesion. Taxes always go up when there is a large stimulus package.

Cutey with a booty:

drill: be specific what you mean by taxes go up. If you are referring to tax revenues, tax revenue = tax rate * GDP (approximately), so, tax revenues can go up if GDP expands with tax rate staying the same. Stimulus plan expands GDP which then expands tax revenue.
Now, let's look at a tax cut only plan. Tax revenue may go up or down because there is a decrease in tax rate whereas GDP may expand, but it depends on whether the GDP expansion is enough to offset the tax rate drop. If you look at the last 8 years, we have had record deficits with tax cut, so this pretty much proves that the gain in growth is not enough to compensate for decrease in tax rate.

Nikkinmiss:

If you want to know the true measure of whether or not tax cuts work, take a look at history. Reagan lowered taxes ( but were still higher than under Clinton ), the economy suffered. Bush 41 lowered taxes further, economy got worse. Clinton raised taxes, economy imroved vastly. Bush 43 lowered taxes & sent us to an unaffordable war, economy tanked almost to the point of a second great depression. The tax cut, trickle down theory only works on paper. Since business related spending is tax deductible anyway, it benefits companies much more if they spend, even if it results in some price increases ( which shows that they care more about personal profits over the big picture ) more people will be able to spend the money to buy their goods & services.
The bottome line is...The demand and ability to purchase a product is what creates jobs. What good does it do to have low prices when NO ONE has a job?

Muttin':

Less money to pay the government, more money to spend in the economy stimulating economic growth thereby creating jobs.

Cutey with a booty:

Well, do businesses expand and hire more people because of tax cut, or do businesses expand because there is more work and business outlook is better?

Muttin':

More customers with money from tax cuts.

Muttin':

If 100 million people save $1500 in taxes, that is $150,000,000,000 Billion jacked into the economy. And id those business's also receive Tax cuts, they will have that much more hiring power.

Cutey with a booty:

Do customers spend more money because of tax cut or spend more money because their jobs are secure so they are not afraid to spend?

Cutey with a booty:

CA: Will people spend the $1500 in tax cut or will they save it in their banking account because they are afraid of losing their jobs?

Cutey with a booty:

And also, according to your argument, tax cut needs to be SPENT to be an effective economic stimulus. So, since the middle/poor are more likely to spend their tax cut immediately for everyday's needs than the rich (who has money to spend anyway with or without tax cut), so tax cut should be directed towards the poor/middle class and not the rich, do you agree?

Muttin':

The stimulus package Obama is creating is 1.1 trillion. Only 5 percent of it is going to a stimulus. If you think 95 percent of the people who get tax cuts are going to save that money in an economic downturn, you are wrong. Look at the Obama stimulus bill. Today 100 percent of voting Republicans in the house voted against it. 100%. And 10 Democrats. Where is the Bipartisanship that the great Uniter promised us? This bill is Garbage. Socialism DOES NOT WORK. Free market Capitalism is the only way to fix Free market Capitalism. By letting these business's go under so that the competition can take up the slack. Not by Nationalization.

Rick:

the tax cuts give you a buffer to keep your people working year round

Nikkinmiss:

CA, this is far beyond the ability to let businesses go under. We're not talking about just 1 or 2 mom & pop shops going out of business because of the Wal-Mart that opened up in town. Comapnies that go under due to competition is a whole other story. This is an avalanche of people losing their jobs. We're spiraling towards a depression & have no options left. Cutting taxes for businesses right now will do ABSOLUTELY NOTHING. With so many companies in the red, do you honestly think that an extra few thousand dollars on their books will give them any incentive to hire? At best, they're just going to use it to pay off debt. Besides, companies that lose money will get refunds, companies that profit, don't need a tax cut. Remember, it's only profits that they pay tax on, not gross sales.

Dimview09:

Tax cuts will give instant relief, this is a counter proposal
http://www.washingtonwatch.com/bills/show/111_HR_470.html

Ricke124:

That is what a lot of us are trying to figure out. We need jobs .

Muttin':

The more money the government takes PatPat, the less business's have to hire people and the less people have to spend at those business's.

Stephanie:

small to big buisness tax cuts so that companys can hire more people or create more jobs. The us has the highest business tax around 35% some countries only have 7%

Probstatsgirl:

No income and high inflation mix in tax cut means zero to you. Just enjoy not paying taxes.

Boxermom:

The theory goes like this:
Government implements a tax cut. (On Income taxes, sales taxes, corporate taxes, whatever)
That allows people to KEEP more of their money. (What a cool concept eh?)
And therefore people are more apt to afford to SPEND their money. (Cash FLOW is important to economists...they like to watch it move.)
It also helps SOME people to pay a little more of their debt a little faster. (So that the citizens of the country don't incur so much liability.)
Keep in mind that federal governments rarely care about individuals (they don't care about each individual person who may have lost their job) but they plan their strategies based on trends and groups and averages.

Cutey with a booty:

I see. so tax cut needs to be SPENT to be an effective economic stimulus, correct?
Since poor/middle class are more likely to spend their "taxcut" rebate on every day's needs whereas the rich who already has money to spend with or without tax cut, so tax cut should then be directed towards the poor/middle class then?
Tax cut won't do ANY good at all if people just keep the money in the bank.

Sweet T:

It's the same silver bullet Conservatives have been touting for the last 6 years. Can't you people out there see all the tremendous economic growth we've been experiencing since Bush' cut taxes? Look at all the new jobs that were created, not to mention the growth of the small businesses we were told were going to benefit , by having more money in their pockets.Yep, we're the envy of the industrialized nations of the world thanks to Conservative economic principles.

Cutey with a booty:

Was economic growth a result of tax cut or because of the rise in leverage spending due to rise in real estate values?

Sweet T:

I was being sarcastic ...in my opening line.

Sweet T:

In fact I was being sarcastic throughout my whole diatribe.

Muttin':

You were actually right up until the Congress took over in 2006

Dollar brand:

I don't believe the tax cut will solve the problem we are dealing with now, in the long run those new tax cuts will probably work effectively. With many stores still closing, and so many unemployed, we need to do the recovery package. The unemployed will suffer, they will lose their homes, and it is going to take time to get re-employed with so much competition at this time.................This is a time sensitive situation.

Muttin':

Why so urgent? It's not urgent at all.

Cutey with a booty:

CA: depends on who you ask, economic cycle needs to be stopped because it spirals downwards. economy bad -> companies firing people -> less people spending -> economy bad...
This viscous cycle must be stopped.

Muttin':

Then get the Government out of the way. That is the solution. Obama is making it worse.

Dollar brand:

CA, Obama is not the problem, he is trying to fix the problem, but you are determine to blame him, are you being realistic.............

Muttin':

Its not just him. Its Congress dear. I know what I am talking about.

Jeff:

lower credit card rates

Rick:

I don't have a job that I get paid. I still pay 35% in taxes from investments, dividends and rent receipts. A tax cut will help me.

BUD 28:

It won't help you. It will just help those trying to pay for our socialistic society and its unemployment.
It presupposes that we will still have people to redistribute the wealth from. The liberal mind set of the Republicans is getting just as bad as the Dems.

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