Do Tax Cuts Create Jobs? If So, How?
- Thread starter OddTrader
- Start date
I am not a libertarian or Anarcho capitalist, but there are schemes where they privatize all of the above, and non-subscribers either opt out or pay an a la carte premium.
Untenable, IMO. All socioeconomic systems work until you measure effects of market elasticity on the consolidation of power.
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A point reaches where the general natural laws of physics start to bear upon the situation and standard old theories stop working with normal efficiencies.
US economy has reached such a tipping point where a major surgery/repair is required to reach a situation where normal rules are again in position to be enforced.
Trump came with that agenda but it seems is not implementing it with sincerity. While only less than two weeks on the job, so will get the benefit of doubt.
Jobs are created from economic stimulation i.e. demand. Tax cuts can only temporarily help but real reasons those stimulation are called for have to be attended i.e. Debt levels in the US case.
US economy has reached such a tipping point where a major surgery/repair is required to reach a situation where normal rules are again in position to be enforced.
Trump came with that agenda but it seems is not implementing it with sincerity. While only less than two weeks on the job, so will get the benefit of doubt.
Jobs are created from economic stimulation i.e. demand. Tax cuts can only temporarily help but real reasons those stimulation are called for have to be attended i.e. Debt levels in the US case.
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That's local gov, local gov works well, like the game warden= fine. Of course tax cuts create jobs; same way 50 % off sale pleases sellers + buyers[volume may increase, usually does=LOL] . NO need to cut excise tax on ammo; buyers can CHOSE simply to buy more or less ammo.Wisdom is profitable to direct......................................................................Good question.
Actually as a business owner it works the opposite for me. If I don't reinvest in my business, that extra money is a profit subject to tax. The higher that tax, the more I'm incentivized to reinvest my profits. The lower it is the more incentivized I am to take the money and stash it in savings where it does the economy no good at all. Keep in mind, tax rate doesn't impact the amount of money I as a business owner have available to reinvest in my business. Money I reinvest in my business isn't taxed at all under our current system, it simply lowes my profits. So lowering taxes most certainly does not create "More money in the pocket of business owners that can use it to expand their business", that's a pretty categorically false statement.
If you argue that lower long term capital gains tax on the sale of a business incentivizes reinvestment by a business owner I'd agree with you 100% That's the reason I'm incentivized now, based on current tax law the first $10M I receive when selling my company is tax-free (section 1202) and I get long-term capital gains rates after that. So I want to put as much of my free cash flow into growing my business as possible to push as much of that profit into long-term capital gains as possible. Lowering tax rates would actually incentivize me to do less of that, because the disparity between the tax on my profits and my eventual long-term gains tax would become smaller.
so how do you feel about tax cuts in Italy, France or Greece without corresponding decrease in spending?
Local govt military? How do you think this is going to work in this day and age?
Also, why can't you extrapolate from local govt working well to, say, state? If that works, why not extrapolate further?
Those are theories... I am pretty sure that this is a rather difficult idea to implement in practice.
Like anything with scale, it'd lead to catastrophe without some way to manage eventual monopolies.Hyper-capitalists like to think there will always be a smaller competitor to diffuse a road/fire/police/military monopoly, but I think market in-elasticities and sheer human irrationality combined with the consolidation of power make it impossible. Also, those things are products that we rarely get a mulligan on.
I'm an all-roads-lead-to-Rome type: Capitalism, economic competition, it's great. Socialism, pooling our money for bigger purchases, also great. They can have synergy. The problem is neither of these in isolation, but managing the consolidation of power, since that is what allows entities to break the rules anyway.
One relatively obscure economic policy I am very in favor of is Georgism and the Land Value Tax, a tax endorsed by economists from Adam Smith to Milton Friedman as being the only pure, efficient tax. The concept can be extended to a capitalist or socialist scheme. Some advocate replacing all taxes with the Land Value Tax, since other taxes produce a drag on incomes but this actually encourages expansion and growth in undeveloped regions.