How many people will lose their homes once the tax break that Bush set up is allowed to die?

Question

See we at the lower levels are getting a bigger break than we are led to believe by the democrats, also look at the economy its banging. Taxes will slow that down as more money flows into the Government pockets. That generally causes a slow down in economic groth thus yeilding less sales of goods and a down turn in economic growth.

So what other effects will this slow down cause?

SeekingApproval's

You only get a tax break if you are working so you must either not pay taxes or be working.

Undergro…

your name suits you you have no idea of economic theory and therefore are ill equiped to discuss this idea as a adult.

rollo_tomassi423

did you miss the 2000 stock crash when it was proven Clinton was cooking the books and he was restricted the SEC from busting people so Bush had to clean that entire mess up, there never was a surplus it was another Clinton lie.

rollo_tomassi423

people are losing their homes because they were dumb enough to sign adjustable rates and or ballon payments and fall to plan for the increased payments.

TheEcono…

The rates were lowered in all tax brackets and will hurt the porr worst just wait, this is to funny you claim to be an economist.

Answer 1

This is subject to debate... it depends on whether you are a fan of supply side economics or not. to be clear tax breaks are given to the wealthy because it is assumed that they will reinvest it in capital which will in turn create more jobs, and stimulate the economy as a whole. if this is true then it will affect the middle class albeit indirectly. Whether or not people will lose their homes depends on how much it affects investment since i ASSUME that the tax roll back won't affect the low and lower middle class people who's homes are in danger. Also it should be noted that the economy is not "banging" as evidenced by the paltry 1.3 first quarter GDP numbers

Answer 2

It is very unlikely that the Bush tax cuts has brought an end to business cycles and at least half of the economic forecasters are expecting an economic slow down within a year and very few think the expansion will last until 2010 when the tax's cuts will die.
By 2010 the housing market should have recovered and inflation of 2 or 3% will have increased salaries about 10%, but leave mortgage payments unchanged. If people can make their payments now and survive the transition to higher interest rates, most homeowners should be in good shape by 2010.

Answer 3

It's complicated issue. The Bush tax break has worked to lower the defacto tax increase due to inflation.
Our per capita dept has doubled over the last 10 years, in numbers. In terms of inflation adjusted debt, it's probably 40%. So the issue is as a whole we have borrowed 40% more than we did 10 years ago. Couple that with off prime mortgages and we have a real need for a tax break. The raising of the thresh holds for tax brackets he did are good.
In order for inflation to minimally affect the economy the tax brackets have to change with it. His break did that.
Once money is out of the economy it is the duty of government to put it back, IMHO. That's why all the spending by the gop. If it were to remain in the government we would spiral down the economy.

What else will happen? Inflation will increase because of the forced re-stratification of incomes, reduces transaction volumes and increases costs.

Answer 4

People are losing their homes now because interest rates are going up. That has nothing to do with taxes. Also the amount of money going "into government pockets" as you say doesn't seem to have much to do with growth, since Bush has vastly increased the amount of money the government is spending. And remember that almost all the money the government spends goes right back into the economy too, whether it is in the form of Social Security checks that people spend on rent and groceries, or defense spending that goes to Haliburton and Boeing. What can affect growth is whether the government is running a surplus or a deficit, but somehow Clinton managed to increase growth while running a surplus, but Bush has not done as well even while creating a huge deficits. And I don't think you are right that people in the lower economic brackets have been getting much of a break on taxes under Bush. You might want to check your facts there.

Answer 5

Here is what will happen: People with low incomes will see no change. Bush's tax break only gave them a one-time refund, so they will continue paying the same amoutn in taxes. People with high incomes will pay drastically more in taxes, since they received the overwhelming majority of the benefits from the tax breaks. Further, the money the rich people did receive did NOT affect economic growth, because of the basic economic principle called MARGINAL PROPESITY TO SAVE. Economic fact, proven repeatedly, is that there is a direct relationship between income and MPS. The higher a person's income, the higher the percentage of that income they will save (not spend). Since only spending affects economic growth in a significant way, Bush's tax breaks were a completely inefficient method of growing the economy. In fact, data shows that about 80% of the money saved by Bush's tax breaks went directly into the bank and WAS NOT SPENT. When the breaks expire, this money will revert to the government and will be used either to pay down the national debt and thus reduce inflation, or to finance programs like social security and/or NCLB (remember that, republicans?). These programs' benefit will obviously be felt mainly by the poor, making the net effect of cancelling the tax breaks an overwhelming benefit to the lower classes of society, and a marginal blow to the rich (hey, they weren't spending it anyway!).

Answer 6

Wow, good point. Yeah, we're moving toward a weaker economy, and people are already losing their houses. If the Democrats eliminate some of the tax breaks, that's like raising taxes in a recession, and it would make it much worse. Scary!

I hope there are some sensible people running for office next term. People who can think independently of their parties, because both parties have acted stupidly in recent years.

Answer 7

Such an impressive argument. Yeah, it's "banging" down on the bottom, alright. Just keep repeating those GOP talking points without thinking.

Funny thing is, Bush is a big government, big spending Republican. He's spending all kinds of government money and expanding programs, only he's letting it all pile up into debt. And who do you think is going to eventually pay the bill that Bush is going to skip out on?

Vote GOP, the party of irresponsible multi-millionaires who screw the rest of us.

Answer 8

what tax break is that exactly. I'm not getting anything

Answer 9

to many all will be effected.