Thursday, October 28, 2010
Bye-bye, tax breaks?
This article is about how upcoming Obama's fiscal commission will issue its report to cut back the 200 tax breaks in the federal code tax breaks that cost more than $1 trillion a year. Many have issued support for the cutting of tax breaks and it looks like it could be likely to pass. Cutting back on tax breaks can be a more efficient way to bring in revenue than raising income tax rates because it would subject more work and business income to taxation. If done right, it also promises to make the tax code fairer and simpler. Do you think we should cut back on the tax breaks and follow though with the breaks? Why?
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5 comments:
My concerns with cutting back the tax breaks are how is it going to effect these companies or people who benefit from these breaks. I would be concerned with an increase in the unemployment rate. With this increase consumption levels will continue to decrease which will slow down the economy even more.
It would be nice to decrease unemployment, but not if its at the expense of the federal budget and deficit. Many of these tax breaks have to end and the economy needs to recover in other ways if we want to make real, actual progress and economic growth. Under this same conservative logic, we could end taxes altogether starting in 2011, that would get us out of a recession even faster. I'm pretty sure increasing spending and lowering taxes is called "Voodoo economics" for a reason.
I think in class we learned that during a recession you want to cut taxes to promote spending. Doing this keeps the economy moving forward, and out of a stage of people just saving. So I would have to disagree with the idea of cutting back on tax breaks..
Tax break, in theory, can be a very effective tool to stimulate the economy. If it is used right, it can help boost the economic recovery. However, tax break also comes at the expense of poorer people getting lower share from the government's income distribution program. Therefore, the use of tax break can be simultaneously good and bad for each social class.
One of the reasons unemployment is so high is because corporations and wealthy individuals have already recovered and are hoarding too much cash instead of investing. This is screwing the middle class by decreasing the availability of jobs. Tax cuts for the wealthy won't help the economy if they aren't investing. Instead they will hurt the economy by raising our deficit even more.
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