It appears the tax stimulus has worked to increase GDP. Why not continue tax reduction to strenghthen economy

Question

It appears the tax stimulus has worked to increase GDP. Why not continue tax reduction to strenghthen economy

Answer 1

Actually the argument that the tax stimulus increased GDP is not exactly a slam-dunk.

The Bush economic plan, like Reagan's plan, had two inputs.  One was to lower taxes a bit. The other was to increase spending, spend at enormous deficit levels.  And two outputs: (1) a small rise in GDP and the economy and (2) enormous new debt.

Now whether you are 'liberal' or 'conservative' depends on which of these inputs you connect to which output.  To me it seems more like the deficit spending pumped more money through the economy, raising GDP and even raising tax revenues slightly even though rates were lowered a little.  BUT we still have these enormous debts to pay off.  Anyone can live high off the hog for a few years if they don't mind running up a big debt, and especially a president, who knows the bill for the debt will come due in some future president's term.

Answer 2

The US deficit is at $10 Trillion.

That's double what it was when Dubya took office.

Who exactly do you think is going to pay it down?  When the xxxx hits the fan, the GOP will wish the Dems were in office (though the deficit is the fault of both parties...but I hold the GOP more accountable because they keep claiming they will cut spending).

The deficit is growing at $1.8 Billion a day.  There are only 300 million Americans, so that's the equivalent of needing $2190 MORE in taxes each year from each of us.  That's not something solved by handing out $600 tax cuts, massive amounts of EIC, etc.

  

Answer 3

Because the Democrats want to increase spending and social programs. That takes money and the only way they know how to get the money is to raise taxes.