The Implications of Making the 2017 Tax Cuts Permanent
Senate Republicans want to make the 2017 tax cuts permanent. While lower taxes sound great, they also mean less money for the government, leading to more borrowing. That’s where the debt spiral comes in. If the government keeps borrowing to make up for lost tax revenue, the national debt grows. And if it grows too much, it can slow down the economy in the long run. Some experts worry this could hurt future generations who will have to deal with that debt.
Supporters argue that lower taxes help businesses grow and create jobs, but it's unclear if that growth would cover the lost revenue. The big question is: Can we afford this without hurting the economy in the future?
Source: https://www.reuters.com/en/us-senate-plan-make-trump-tax-cuts-permanent-raises-debt-spiral-worry-2025-03-02/
3 comments:
I assume the idea of the tax cut would be to increase saving and investment. Then, the productivity would increase along with GDP. But the lack of money that the government had would cause many issues for the economy.
I understand why they might consider this a benefit; however, we are already trillions of dollars in debt, and we do not need to borrow more money. It seems the government may be focusing on other issues before addressing our debt. This perspective leads me to believe they are proceeding with the 2017 tax cuts because they feel there are larger problems to tackle than our debt.
It is certainly important to take into account the immediate benefits of lower taxes against the potential burden of increasing national debt on future generations. I am curious if the government has used different models to forecast the long-term impacts. It will be interesting to see if they decide to take the risk and how it will impact our economy it in the future.
Post a Comment