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Old 10-17-2004, 03:22 PM   #72 (permalink)
onetime2
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Location: NJ
Quote:
Originally Posted by OpieCunningham
The middle class. There are far more people in the middle class and the rich are more likely to invest their money, which, as I understand the question, is not the same as spending.

Some of them. But most of them were not waiting for tax cuts to make purchases, as they already have money to make those purchases.


Because such a President has a view of economics which is questionable. If he believed that cutting taxes for the rich would jump start the economy, he would cut taxes for the rich. Whether cutting taxes for the rich jump starts an economy is highly debateable.

Tax cuts targetted for the upper class, as these tax cuts were, are intended to promote investment, not purchasing. This is trickle down economics. It is not a guarantee and we can look back over the past 3 years and see that there was no jump start to the economy. The idea is to promote investment in companies so those companies have more resources to hire, which grows the middle class. What we have clearly seen is that companies are making great strides in profits - but these increased profits are not translating into great strides in job growth. Analysis of the little job growth we have had in the past year has shown that payrolls are not increasing respectively. Tax cuts for the upper class did not result in the intended benefits to the economy because they did not trickle down.

Cutting taxes for the middle class would have been just as likely, if not more so, to promote the economy by affording the middle class the ability to make purchases that they had been putting off due to a tightening of their finances and general economic uncertainty. These purchases would then benefit the economy by placing a large flush of cash into the economy. Benefitting large companies, small companies and investors - meanwhile, the consumer confidence increases. Tax cuts targetted to the rich is a backwards method of affecting change in the economy.
You are confusing tax cuts for businesses (predominantly supply side) and tax cuts for individuals. As you have correctly pointed out, the wealthy will not spend more when given a tax cut.

The tax cuts put into place by Bush went to everyone and everyone that I know that got refund checks promptly spent them. That was Bush's plan and that is precisely what happened.

We can certainly argue about its impact on the economy (I agree that it was not responsible for a significant boost to the economy but it most certainly was a tiny bump).
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