Just to muddle things up a little bit Stevi the main benefit to the economy from tax cuts isn't the extra money it leaves in taxpayers pockets - the impact of spending those tax dollars, whether from taxpayers or the government - is virtually the same. The real benefit from tax cuts is the incentive to tax payers.Stevicat wrote: Tax cuts and tax increases take time to have an impact. Clinton benefited from the Reagan tax cuts in the 80s. He took the top individual rates from over 90% to the low 30%. This is what helped created the boom in the 80s that Clinton rode along with the technology boom he enjoyed. His tax increases (including Bush #1's increase) started to have an impact on the economy towards the end of his second term and into Bush's first few years. Bush's tax cuts are now impacting the economy now which you even admit is doing better.
Tax cuts put more money into the pockets of the taxpayers which allow them to fuel the economy. To put it simply, they have more money to buy a first house or a bigger house which employs contractors and sub contractors to build, loan officers to process the loans, people to process titles, and real estate agents to help sell and buy. Multiply this across the country and one can see that the contractors, banks, title companies, and real estate offices have to hire more people to handle the volume which puts more money in these people's pockets which increases the Treasury's tax receipts. More people employed who pay taxes. It's a beautiful system and it works when allowed to.
lowering tax rates gives more incentive for people to earn more, or at least report more income, and that is what fuels growth in the economy. It is a subtle difference, but an important one.
ReMax the old "rich are getting richer, poor are getting poorer" line, or alternatively "more people live in poverty than ever before", is as lame an argument as can be made. First of all, how can anyone possible say the poor are getting poorer? Poor today means you have 2 tv's and a piece of crap car. 50 years ago that meant you were middle class. 100 years ago you were rich if you had indoor plumbing. Clearly what would qualify as poor today would qualify as extravagently rich 100 years ago, yet every year the media trots out that tired line. Yes the rich are getting richer (and why wouldn't that be a good thing, do we really want the rich to be poorer?), but the poor are better off than they have ever been as well. Every year we put more people in poverty by moving the poverty line.
The beauty of the american system is not that everybody will be economically equal, but that you have a chance to change your economic status. Look how many "high tech" millionaires were created in the last 15 years, and how many of those people came from middle class or poor families. Imagine the impact on society if those people, due to excessive tax burdens and other policies designed to make everyone even, did not have the chance to become millionaires, and didn't make the sacrafices and effort to create that wealth.
Of course if you think you are under-taxed you are always free to send more money to the government - they will accept whatever you send them!
