Alan Greenspan is making the claim that big tax cuts are not what is needed in America right now and I agree with. Although tax cuts sound nice because everyone wants more money, in the long run, these tax cuts could lead to our national debt getting out of hand and hurt America in the future. Greenspan made some key points, one of them being that our economy is doing well right now and argues that the U.S. is currently at full employment. The unemployment rate is at the lowest it has been in seventeen years currently at 4.1 percent, so I don’t believe there need to be tax cuts in order to accelerate wage growth because that will currently happen on its own. The debt-to-GDP ratio is currently at 75 percent and is expected to increase to 97.1 percent by 2027 under the new tax bill. Under the existing tax structure, the debt-to-GDP ratio would only reach about 91.2 percent by 2027.
http://money.cnn.com/2017/11/10/investing/greenspan-tax-cuts-mistake-debt/index.html?iid=Lead
Part of this idea is that the firms will stay in the US, keep their funds here, and hire domestic tax paying workers. As well as a higher amount of investment in publicly traded companies, meaning more tax being paid on earnings on dividends and stocks.
ReplyDeleteI would have to agree with both Tj and Greenspan. There is no need for big tax cuts right now. We have an extremely large deficit and trillions worth of national debt. There is a lot of economic growth and like you said, unemployment is at full strength. We should focus on getting our deficit down and reducing our debt.
ReplyDeleteSince you don't think tax cuts are the answer, do you think our current tax structure needs reformed? Our current corporate tax is driving large corporations out of our country and dissuading new corporations to form in the United States due to our 35% corporate income tax while other countries are giving out subsidies for opening up shop in their countries. This current tax structure is resulting in a loss of jobs and potentially a reduction in our GDP which could lead to a lower level of happiness because GDP per capita is a great indicator of personal happiness.
ReplyDeleteI agree with TJ, and think that tax cuts would only slow the progress that we have seen in the economy. I also think that given that wages have remained somewhat sticky and have not seen a decrease with increasing employment rate gives more reason to keep the tax cuts would be unnecessary.
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