What are the pros and cons of raising/ lowering taxes?

Answer 1

Something that people don't always consider when discussing taxes is the effect of taxes on people's behavior. Specifically, certain items in the tax code are put there to either discourage or encourage behavior, based on what the government considers to be "laudable behavior"

For example, interest on mortgages is deductible, while rent is not. This stems from the premise that owning a home is preferrable to renting, as it creates a more stable society, and engenders a greater sense of community. Another item is charitable contributions, which are deductible for most people. This also stems from the sense of community, but also from a sense that as charities do more good in a community, this takes a burden off of the government.

On to the question at hand -
Raising Taxes:

Pro: It enables the government to ensure that services to citizens are available, and necessary expenditures on infrastructure (roads, etc) are met without the need for excessive bond issuances.

Con: It lowers the disposable income of citizens, and lowers the consumer expenditures of the general populace, which hurts businesses and the overall economy. - This is particularly true in the case of so-called "luxury" goods, such as high-priced cars, jewelry, and other such goods.

Con: It encourages excessive spending on the part of the governmental entity due to a "need" to spend money. Governments rarely spend less than they take in, and quite often spend more than they take in. As the pie gets bigger, there is no indication that the government will not spend it all.

Lowering Taxes:
Pro: Increases disposable income of citizens and enables economic growth. Another side-effect is it limits government waste by requiring government spending to be justified against other possible government expenditures (Government has a tighter budget).

Con: Possible lack of public services, particularly for unpopular services, such as prisons and welfare activities. Another poster mentioned the feeding and clothing of prisoners as an unpopular government expenditure.

Con: Big Spender Effect - The government, due to its immense size, is more capable of taking on projects that individuals and corporations could not easily afford, namely road construction, most school systems, and other projects. As the tax rolls decrease, the ability to accomplish these projects is diminished.

Answer 2

Pros And Cons Of Taxes

Answer 3

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RE:
What are the pros and cons of raising/ lowering taxes?

Answer 4

It's your money----think about it. Why give your money to someone else to spend, especially if you may not participate in any of the programs on which your state, local, or federal government intends to spend it? If you were comfortable giving money to your government to spend at their discretion, it wouldn't take a tax levy to get you to give them more, would it? If you and all of your neighbors have less money to spend in stores, restaurants, leisure activities, investing, or anything else, then the economy slows down. Money isn't circulating through it like it used to. The only good thing about taxes is that it forces people who would rather put the onus on everyone else to pay for their fair share of social programs back onto individuals so that nobody ducks their responsibility. More money into the government is supposed to mean better schools, better roads, etc.......but that's only if the government spends it with responsibility and as it was intended. The bottom line is, how much do you trust your government and how much do you know about where your tax dollars are going? (And after you research this and find out, what are you going to do about it?)

Answer 5

The con of raising taxes is that most people are not up for it. They don't want the taxes raised, but does the government really care. I mean, they're the ones in charge, not us. A pro for raising taxes is that they are beneficial. For example, if taxes are raised, and as a result there is improvement in the state (better police force, more fire departments), then the taxes are helping out.

The pro to lowering taxes is that most of us would be happy for that because, as it is, most of us don't want the government to get our moolah. The con to this is it would cut down on some of the public services we have (police force, improvements for the streets, etc).

P.S. Did you know that some of our tax money goes to prisons because we actually pay for the prisoners' food, clothing, and whatever else they need. Thus, this would be another reason why many people would want taxes lowered. They don't want to be feeding and clothing criminals. Who would anyway?

Answer 6

pros - raising taxes create revenues for the state agencies to use for development. they fund our schools, roads, suppoort the military, create employment in the governments etc
cons - they reduce the discretionary income in families and cause misery especiaally when the inflation rate is raising.

Answer 7

Aw, pish tosh, It just means the politicians , don't get to put as much money in their back pocket, to build newer new brick homes, and they don't care that we can't afford to buy a home, because income is low and taxes are too high for us!!

Answer 8

Funny, I was wondering the same thing myself

Answer 9

Hurrah, that's what I was searching for! Thanks op of this question.