Tax Cuts Won't Fix The Economy
Posted on 05. Jan, 2009 by Brad in Late Breaking News | Twitter: @bradhart |
I have heard “tax cuts” enough that I think my ears are going to bleed. The next time I hear those words out of the mouth of someone who neither understands the economy or will be directly affected by those “tax cuts” I might bitch slap them. Personal tax cuts don’t pump money back into the economy. While business can be positively affected by tax cuts and should be considered, that is not the issue here. Personal tax cuts are simply the means by which those who aren’t having financial problems have to pay less into the system. These people don’t turn around and say, “look honey, we are going to owe the IRS a thousand bucks less this year lets go spend it on something to boost the economy.” The people who get “tax cuts” are more likely to save that money or pay off some debt rather than spend it immediately. If you want to stimulate the economy you institute tax credits that affect everyone across the board, those who do specific things, or even on the low end of the income scale. The upper middle class aren’t going to change their spending and savings habits, and a two thousand dollar tax credit isn’t even going to be noticed by those who are rich. However if you hand a family with a couple of kids making thirty grand or less a few thousand bucks they spend it quickly and they spend it locally.
If I got two grand we would immediately put it towards a car, being without sucks right now and makes it damned hard for Katy to find a decent job. If I didn’t need a car, two grand would be gone within about two weeks, and most definitely within a month. The economist says I should pay off some debts, but the realist knows it will be a long time until I have another two grand to plunk down on anything. So where would two grand go? First it would be spent on a new TV probably something in the 42″ or larger category. I might buy that online depending on the deals I can get, but a lot of people would head right over to Wal-Mart and get the biggest they can get in their car. There goes half my money. The rest would be split into two categories. Immediately used items that I haven’t bought because we could get by, things like clothes, out to eat food, and beer, would get probably sixty percent of the spending. Things that I consider non immediate, but frequently used items like laundry detergent, trash bags, light bulbs, etc would be in the next group.
What would you spend your money on?
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