How do tax cuts help?
January 6, 2006 5:16 PM Subscribe
What's the economic reasoning for the idea that tax cuts stimulate the economy?
posted by hydrophonic to law & government (47 answers total)
Bush gave a speech on the economy today. He said the economy is getting better, thanks to his tax cuts. I've heard the arguement that reducing taxes for the middle and upper class gives them more money to spend and invest, which means the economy grows. But wouldn't spending by the government do the same thing? Or be possibly better, since the government probably spends more on domestic rather than imported goods, services and labor? And the government doesn't save, which people might tend to do in a recession.
I'm not looking to understand the claims, not start a debate. Examples that include local economies or other countries are welcome.