President Trump wants the House to pass the Senate’s budget, tax reform. The framework calls for only three tax rates of 12%, 25% and 35% but allows for the possibility of a fourth tax rate to ensure the new tax reform doesn’t benefit the rich at the expense of the lower and middle class. The op-ed claims the average family income will rise by about 4,000. If the bill is passed, the tax cuts will lead to more spending from households. Trump is trying to create higher wages and more jobs for the economy. We will see if is able to get his tax reform bill passed.
Trump is modeling this a little after trickle down economics. He thinks that lowering taxes will actually cause people to spend more and create economic activity. I am really not sure whether or not that will work. It is interesting because while the government is planning to lower taxes, the plan on spending an enormous amount of money that will only continue to add to the governments deficit and debt. Hopefully, corporations will be able to reap the benefits of this tax cuts and use it positively to create jobs in local communities and add growth to the economy.
ReplyDeleteThe benefits of tax reform are not equally shared. Cutting individual income tax rates will modestly increase the earnings of the typical American household, while significantly raising the federal budget deficit. Deficit-financed tax cuts do not sustain economic growth in the long run.
ReplyDeleteTrumps tax plan is good for the reasons that he has been talking about. According to experts, household income will go up and higher wages will result in more consumption. These types of changes can indeed help stimulate an economy. Although, the talk of decreasing taxes to firms and taxes in general could just add to the national debt. And regardless, we'll see if it even passes.
ReplyDeleteI agree with Antonio's remarks, however, I believe focusing on increasing incomes/cutting taxes takes precedence over our national debt. Putting more money into the pockets of the lower incomes will increase consumption and stimulate our economy. We are as strong as our weakest link; if we improve the bottom half we can experience economic growth. I like what Trump is doing and his intentions on bettering the country as a whole are great to see.
ReplyDeleteConsumer confidence is high and spending is low, so decreasing taxes is aimed at stimulating consumption. If this is to take place with the vision the President is hoping for, then the economy will continue to grow due to the consumption increase.
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