Is a lower tax rate really a tax savings?

Question

We all know that when people are taxed less ON INCOME they spend more on goods and services...WHICH ARE TAXED, thus providing for increased tax revenues. So, doesn't increased revenues mean that americans are paying MORE in taxes? Does anyone see the shell game that is called lowering income tax rates, and RAISING sales tax? Also, does fiscal conservatism begin and end with paying less? Or should it ALSO include SPENDING LESS? I ask because I answered a question and was given a thumbs down for wanting this clarified for me.

peopel CHOOSE to spend more..and the GOP counts on people to do that, or supply side wouldn't work. Don't fence sit.

pkthames, every one of those 'surges' was follwed by a recession

Answer 1

Less federal money available to state and local governments just means they will increase their tax rates. You will pay somehow.

Answer 2

In a sense you are right. Taxes are shifted from the federal level to the local level. But it's up to the locals who vote in the districts to take care of business at the ballot box. The more state or local services you want, the more the gov takes. Now if you are comparing an additional sales tax of 7% locally compared to the whole dollar the federal gov is being denied because of tax breaks, then then I'll take that other 93% and spend it on something I want. That could be charity or a good or service of my choice. I'll take that exchange any day. I personally feel it is not the governments responsibility to take from the so called rich and give to the poor. In some cases this may be justified but very few indeed. It also should be driven to the local level where people can control the government with their vote much more easily. the whole system is a shell gmae if that's what you want to call it. We work somewhere to earn money so we can buy food, shelter and maybe some luxury items from many of the same businesses providing the work to us. Then you have the government wanting a piece of our work. Within reason, that is ok. But it is very apparent that reason is being thrown out the window. I work for my needs.

Answer 3

Yes, increased revenues mean more small businesses have started up. We should do away with the IRS and go with the sales tax.
Money in the hands of people stimulates the economy, whether they are rich or poor. The problem- how to you put money in the hands of the poor? Transfer of more wealth from the rich to the poor each year? This would only create greater dependency on entitlements and give lessen the incentive to achieve. Give the poor greater tax cuts? You can only cut the taxes for the poor by so much, because they don't pay much in taxes. When Tom Daschle said that the result of a proposed Bush tax cut would mean that a rich person would be able to buy a new car, without realizing it, he proved the theory of Trickle Down Economics. The person selling that car would generate income that he would otherwise not have had. Please note that if that person sells enough cars, he will gain wealth. If tax rates in this county were at 75% what would happen to the economy? The answer is that no one would have money to spend on anything except housing and food. The result would be that businesses everywhere would fail, because no one would have money to buy clothes, electronics, entertainment, repairs for their homes or cars, go on vacation..... If they did buy such things, they would have to go in to debt to do so. How would this help the working class or the poor? Please note the average taxpayer, pays roughly 50% of their income in taxes. After the attack on September 11th, Hillary Clinton said, "come to New York and spend money." She knew if people stopped coming to New York and spending money, businesses would fail and the economy in New York would suffer a great downturn, which would hurt the average working family. This is interesting considering that liberals are for tax hikes and against tax cuts. The only thing that helps the working class is a strong economy. It gives the average worker more freedom and more bargaining power. When the financial sector was booming from 1987 through 1989, workers were getting bonuses, overtime and stock options. When the financial sector suffered a downturn in 1990, it trickled down. There were no more bonuses, overtime, stock options and their were layoffs.

Answer 4

cons are precise on fairly some organization themes... they are many times incorrect on how lots "companies love workers and would't wait to advance their wages and hire extra" however... that's a common plank of their recommendations... so some distance as i will tell, American organization has replaced... they'd somewhat pay a 23 3 hundred and sixty 5 days previous 20k to get the activity accomplished 0.5 way, than an experienced guy or woman 40k to do it the way in which for all time... and in the event that they lose consumers, they do no longer care... see GM and Dell...

Answer 5

If they stop taxing the income, I will take the amount that was taxed and save it. I am 50 now, looks like that is the only social security I will ever see. Gotta have something for retirement and a rainy day.

The social security retirement age is so high now, most of us that work, will probably never see it. Paid all that money into it for all these years, now will never see it.

Answer 6

People "choose" to spend more so there is an element of volunteerism involved. Also, the Federal government doesn't have a sales tax so that doesn't impact Federal revenues.

Answer 7

They way I see it, when I am taxed less on my income, I have a choice of if I wanted to spend that money or save it - I choose to save as much as I can so that when I retire, I wont have to rely on the government to take care of me.

And yes fiscal conservatism is suppose to be spend less save more.

Answer 8

With all this extra money floating around, explain to me why the savings rate is as low as the great depression?

Answer 9

I got a tax refund when the taxes went down. I got my teeth fixed. I hope they do that again.

Answer 10

Well all I know that is in the 3 times this has been done in U S history it was followed by a maasive surge in the economy.. Im no expert, but its seems like a good trend to me..