What am I missing here about cuts in taxes and gov spending?

Question

If the government taxes a corporation and spends every dollar it collected, those dollars go right back out into the economy. If the government cuts corporate taxes and spends less, those dollars may never get spent. I don't know of any business person that decided not to go into business because they were concerned they would have to pay taxes on their profits. Am I missing something here? If you choose to answer, please be polite, don't call me names and proof your answer so you look literate

Yes, they could be invested in Gov't paper, stocks, or spent in the open economy. But they can also be put into shoe boxes and stored in the back of closets, or moved off shore to banks or to purchase the paper of other governments. With our government spending them in the United States, we know 100% of the money is going back into our economy.

And it goes beyond a rich person vs poor person thing. The majority of Americans are not rich. Yet they are opposed to taxes and government spending. Is it because our government has no accountability? Perhaps we need to hold our officials to standards and make them show results.

Answer 1

The rich don't want to pay taxes the poor have to pay taxes....

Answer 2

The dollars will still be spent, just on different things. Lets say that a company gets a tax break that results in a $500 million savings for the company. The company now has that money to do several things:

It can pay a special dividend to shareholders or increase an existing dividend. This then get paid to shareholder who now have more money to invest or spend...all of which eventually gets spent in the ecomomy.

It can give better bonuses to employees. This will lead to the employees buying more or larger items like new cars, boats, electronics, etc...all of which improves the economy.

It can now afford to hire more employees, creating jobs and boosting the economy.

It can spend the money on a new branch office or new site, creating construction jobs.

Bottom line is that regardless of who gets the money, it gets spent in one way or another. It is just a matter of what the money is spent on. Even money saved still gets invested in something, and you need people that handle and manage the investments...even something as simple as a bank account needs people on the bank's side to monitor, reconcile, and provide client service for the account.

Answer 3

What do you mean, those dollars wouldn't get spent? they will be spent bu the person who EARNED them! Or put into stock to grow biz. or in bank to earn(and be loaned out) or in bonds which is loaning the govt. money.