Democrats have been expressing criticism over President Obama's recent acceptance of the Bush-Tax cuts. The Bush Tax-cuts have been extended for the next two years for all levels of income and the flow of unemployment benefits will continue. President Obama has done, tried to do or is still trying to do all he had promised in his campaign and retorted so to accusations and critics of his abandoning his principles. The tax-cuts however, only help about 36000 of the wealthiest American families and add about $25 billion to the deficit. Ms Pelosi said “The Democratic provisions will create jobs and help 155 million workers through tax cuts for the middle class, helping working families who are struggling and growing the economy. The Republican demands would provide tax cuts to the millionaires and billionaires, fail to create jobs and increase the deficit.”
Although, on the flip side, the tax-cuts are believed to help create jobs as the wealthiest Americans will be able to invest in firms and pass down that wealth to the working/middle class, there seems to be a larger population who believe these tax-cuts are not about to help the economy but rather deepen its troubles.
I could go both ways on how I feel on this issue. It may be good to stimulate spending in the middle class, because they are the ones who have suffered the most. However, since trends show the economy increasing, the middle class may spend money anyway. I do think targeting the middle class will help though.
ReplyDeleteI think the tax cuts are not necessarily a bad thing, but there are other options that could more effectively stimulate the economy. Like colin mentions in his article on tax cuts, extending unemployment benefits is one of many other options. These bush tax cuts seem clearly geared towards wealthier Americans and not necessarily a cause for an increase in consumption for the middle class. The trickle down-esque theory Moomal mentions in her last paragraph does seem like a positive consequence of the tax cuts, but I still think there are other more effective tools of fiscal policy in this time of need.
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