what is the advantages and disadvantages of cutting taxes?

Question

As it has always been the strategic move for the the REPS.

Answer 1

Advantages:

- happy voters, who will hopefully remember this come November

- taxpayers have more money in their pocket, which gets spent or saved or invested. More spending means more money in circulation, which stimulates an economy. More saving means more money available for borrowing, which stimulates an economy. More investing means more business spending, which... well, you know.


Disadvantage:

The chief disadvantage is that the government that cuts taxes will have less money coming in, and may have to cut services to its people.

The theory behind this scheme is that cutting taxes like this will stimulate the economy enough that what the government loses in initial taxes will be made up in volume when that extra spending gets taxed. It seemed to work when Reagan did it in the 80's.

Answer 2

Advantage, possible re-election
Disadvantage, Opponent wins
It has nothing to do with the Citizen, taxes like prices will always rise, sure they come down, when it is convenient to a cause, but they go up again. Ever seen a piece of property sell for less than what it cost to buy? no. If you did, it is about as rare as seeing a live birth of an albino whale.
If the politicians cant scare us into paying more taxes with a war, they will invent a war. That is what they do. If there is no controversy, they will make a controversy, that is what they do, and we pay them to do that.

Answer 3

When taxes are cut, business and individuals have more spendable pocket money. That allows for money flow, and money flow causes taxes to be paid on the money flowing. So, while cutting taxes seems like it would lower taxes, it has been known to increase the taxes paid in so the government actually has more money in the budget.

Sue