Tax cuts should help achieve this by the different incentives that they provide based on current status of wealth. Because tax cuts leave everyone with more money, it is a matter of where that money goes that decides whether or not these policies would benefit the economy. Most people who already have disposable income will reinvest most of their newfound capital into the stock market or, hopefully, into government bonds. Members of the lower class will often spend their new capital on physical goods – improvements for their home, clothes, or items for their family. If the money is invested in bonds, the money should be helping to put a dent in the current national debt and minimizing the additional debt created by tax deductions, an estimated 3.4 trillion if Bush’s policies were to pass (NPR). If the money is used to buy new physical goods, then the money is being put directly back into the economy. Companies will have more revenue, allowing them to improve or develop new products, hire more employees, or increase wages for current employees. The impact of tax cuts for companies will be similar to if people use their new money to buy goods or services. Ideally, more employees will be hired and current employees will have higher wages. Though the quality of life will be higher if everyone has extra disposable income, inflation will also occur. With so much extra money being used to buy goods and services, the companies selling those goods and services must either raise their prices in order to have more capital to meet the rising demand of the public. Though tax cuts may help the rich more than the poor, that is not as bad of a result as it is made to seem. When the rich reinvests their money in bonds, the debt is lessened, and when they reinvest it in the stock market,
Tax cuts should help achieve this by the different incentives that they provide based on current status of wealth. Because tax cuts leave everyone with more money, it is a matter of where that money goes that decides whether or not these policies would benefit the economy. Most people who already have disposable income will reinvest most of their newfound capital into the stock market or, hopefully, into government bonds. Members of the lower class will often spend their new capital on physical goods – improvements for their home, clothes, or items for their family. If the money is invested in bonds, the money should be helping to put a dent in the current national debt and minimizing the additional debt created by tax deductions, an estimated 3.4 trillion if Bush’s policies were to pass (NPR). If the money is used to buy new physical goods, then the money is being put directly back into the economy. Companies will have more revenue, allowing them to improve or develop new products, hire more employees, or increase wages for current employees. The impact of tax cuts for companies will be similar to if people use their new money to buy goods or services. Ideally, more employees will be hired and current employees will have higher wages. Though the quality of life will be higher if everyone has extra disposable income, inflation will also occur. With so much extra money being used to buy goods and services, the companies selling those goods and services must either raise their prices in order to have more capital to meet the rising demand of the public. Though tax cuts may help the rich more than the poor, that is not as bad of a result as it is made to seem. When the rich reinvests their money in bonds, the debt is lessened, and when they reinvest it in the stock market,