The Mudcat Café TM
Thread #133944 Message #3043331
Posted By: JohnInKansas
30-Nov-10 - 01:59 AM
Thread Name: BS: Do tax cuts cure cancer???
Subject: RE: BS: Do tax cuts cure cancer???
About as well as they cure a recession
Although the argument by the right-fingerers is that leaving more money in the hands of the wealthy will encourage investment and job creation, it's a lot easier to invest in "paper" that does nothing for the rest of us. There is good evidence that there is plenty of available money, but it isn't being used to build industries or to employ people.
A moderately higher tax rate can be offset by a "business expense" deduction. Although the money to purchase new industrial equipment and to hire people to run them comes out of the bank account, it still offers some odds on returning a future profit, and since invested money can usually be claimed as an expense to reduce your taxable income, the government still takes less of "yours."
Raising taxes on the middle and lower classes will do nothing to create jobs because they have nothing to invest.
Raising taxes on those with significant hoards of "cash" (convertible assets) will encourage investments that are "sheltered" in some way, and most of the shelters - if indirectly - are of kinds more likely to result in expanded industry and the creation of work for the populace. With low taxes on those with the accumulated wealth, it all stays in the bank or in paper trading that does nothing for the economy.