The Democratic party believes that raising taxes for the upper class will fund tax reductions for the middle and lower classes. By taxing the richest one percent with a cap tax breaks generating five hundred eighty-four billion dollars to fund the middle and lower class tax cuts. While also increasing the marginal rate, raising dividends, and dropping estate tax exemption to force those who earn the most to pay the most. The Democrats also believe in raising corporate taxes to finance for government interference in the economy, thus, funding more industries and boosting the economy, therefore, creating jobs. This design follows Keynesian Economics composed of raising government expenses and lower taxes to stimulate demand to stabilize the economy by creating aggregate demand through government intervention. Hence causing recurrent fluctuations in employment that regulates through time. Also causing a lower level of inflation would induce employers to make a bigger investment and employ more workers restoring the economy. Thus leading to the Multiplier Effect where the government spending leads to market activity including more spending boosting aggregate output. Therefore generating more income making citizens richer and causing citizens to consume more. By increasing aggregate output and generating income it provokes …show more content…
As a result of creating loopholes and tax havens for enterprises and the high socioeconomic class. Such a defect is due to the Trickle-down Economics approach that reduces taxes on the high class and industries that never leads back to the lower classes. This is due to the government's impotence to establish regulations on where the money from the tax reduction ends up. Therefore creating a loophole for enterprises to spend the money for any purpose whether it leads to the hands of the lower-class citizens. This has led to substantial tax decreases for major corporations that contribute to the Republicans to receive such tax reductions. Contrary to the Republicans the Democrats believe in increased taxation for the upper class to finance for lower class tax reductions. This provides for the lower classes to obtain money through tax reductions funded by tax increases in the higher class. The Democratic tax proposal is more effective at stabilizing socioeconomic classes because they cut taxes for the lower classes and increase taxes for the high class. While the Republican tax plan expects this done in the long term through an indirect form of tax