Is cutting Federal Income Taxes a good thing or a bad thing?

Question

Is raising Federal Income Taxes a good thing or a bad thing?

Answer 1

Some people, especially Republican economists, believe that taxes can be raised in the aggregate by lowering rates to provide a stimulus to the economy. Obviously there is a limit to how often that can work or how low rates can be lowered.

Answer 2

It depends on what you mean by cutting. Believe it or not, most people pay less than 10% in actual income tax. For those people with lower incomes that fall into that group, it would cost them more. In my opinion, if everyone including corporations had to pay a flat 10%, then it would be fair and the budget would balance very quickly. This will probably never happen. It's too easy. And everyone always wants a break, so it wouldn't last long because the people losing their deductions would scream. The people losing their earned income credits would scream louder and there would be chaos. It would eventually balance out but I just don't see it happening.

Answer 3

Depends on what your goal is.

For a short-term economic stimulus, it is a good thing. It keeps funds in the private sector, and is not a dead-weight.

For the long term, it reduces the amount of revenue the feds take in, which creates a deficit. This deficit has to be paid back, plus interest.