Tax Cuts

[LA_MERC_Dirge]

What is your stance on tax cuts? Do you think they harm or hurt the economy?

I will weigh in with my opinions when I see some of what y'all think.

[Rooster]

heck no, got more money in my pocket to buy stuff with :)
'bout to go to bank and see'bout getting a loan to make a big money purchase (house)

[LA_MERC_LaTech]

It's my opinion that tax cuts that are supposed to bolster the economy do not work. With things being the way that they are, and if I were getting a refund, the last thing I would want to do would be to put it into stocks or bonds. I would, however, be interested in purchasing long-term items (house, car etc).
As far as harming or hurting the economy, I dont know. I dont think it helps, but do think that it is neither harming nor hurting.
I would say it's a non-effect on the economy...but, would lean towards the negative...again, it all depends on what people did with the extra money.

[flipguy]

The effect of tax cuts on the economy are very dependent on how government spendes the money. In the curent economic times, a tax cut would have a negative impact on the economy because the government has been spending a great deal of money to help the economy recover from 9/11. Plus, we have many resources being sent overseas with the war on terrorism and Iraq(and God knows what other secret projects are going on with taxpayer money). During good economic times such as during the 90's, a tax cut would have not had a great impact on the economy. LaTech makes a good point in saying it all depends how the money is spent. The Japanese people are the #1 in the entire world in terms of bank deposits and savings, yet their economy is so bad the government cant even give money away with almost zero interest loans. There are more examples but this is getting too long......

[cd]

I'm young and dont know much, however I think the idea is right on this one. For example.. I get a check of 397 dollars. First I've ever had because I worked all of last year. Now, I'm not gonna save this money, I'm gonna go out and spend it... that's what President Bush is expecting. If millions of people did that... it would boost the economy like he's wanting. Nonetheless, I'm doing my part... I'm getting dsl with my check.

[SnAkEbItE]

Corbin is a example of exactly what ever tax payer out there will do with a return, mabey pay off a Credit card or two and then spend the rest on things they want.

[LA_MERC_Dirge]

flipguy...

Actually microeconmics models suggest just the opposite of a tax cut. When people get an increase in their net income, they tend to view it as an increase in their disposable income and put it right back into the economy. This stimulates spending and growth. The ones who invest it or save it literally create money by increasing banks required reserves available for lending money. This allows small businesses to borow capital and create more welath and tax flow. Tax cuts are always a good idea, but they have a larger impact during leaner economic times than fat ones.

And as far as the spending due to impending war and rebuilding after 9/11, that only cause an increase in the spending deficit, which by the way is at one of the lowest levels (as a percentage of the GNP, which is the actual measure) than in recent times.

The reason the Japanese economy faltered was overreliance by their lending institutions in other Asian economies. This interdpendence allowed overextension of available resources and led to an inevitable stumble. The reason it hard to get a loan there is because so many of their banks went out of business and the rest have lowered risk to a bare minimum.