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Originally Posted by Judy_eroads
Hmmm I don't think that income tax cuts would necessarily bring the immediate stimulus to the economy.. I can not understand how tax cuts will create new jobs?
But for sure it will b nice to pay less taxes  |
Tax cuts provide incentives for those receiving them to spend that money rather than give it to the government, thus creating a job by either supporting a merchant or by using it to create a job for someone else on your own.
You have to understand the tax structure to know how giving tax cuts to the wealthy could do this.
Not everyone pays the same rate in taxes (obviously). The highest earners are taxed at the highest rate (something I disagree with entirely). By reducing the tax burden on the highest earners, you are assuming that they have enough funds to do what they want personally and they in turn will use that money to attempt to make more money by employing someone else or expanding their business in some way (which requires additional manpower).
Simple concept, but still an assumption nonetheless. No different than assuming that cutting taxes on the lower and middle earners will stimulate the economy. In reality it may happen and may not. It's mostly about garnering votes and nothing more.
Yes it is nice to pay less taxes. Wish it would happen one of these days.