How would tax cuts help the economy?

Countries that are the happiest tend to have to highest taxes (i.e. Denmark). If families are given tax cuts they are not going to spend any more money, they're just going to save what they get. That's not going to stimulate the economy. Wouldn't it make more sense to create jobs so families can use the money and put it in banks and buy stuff? I don't know I could be totally wrong. I don't really understand how the republican stimulus plan would work.

Don't give me sarcastic answers please, just answer the question.

Thank you!

2 Answers

  • 1 decade ago
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    The proponents of tax cuts say that businesses would tend to hire more people if they can save some money by paying less taxes. This would presumably create more jobs. Also, tax cuts for individuals would mean more money to spend and that would presumably lead to increased economic activity.

    Whether this actually works or not is a question nobody seems to be asking. I for one do not know for sure.

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  • 1 decade ago

    Tax cuts help the economy because people will spend that money on something. We have a serious paradigm problem. That problem being that a significantly large amount of people think that the government needs to try to solve these kinds of problems. Because of this, the government has taken the authority and actually caused this problem.

    The best way to fix the system is to get rid of our Central Bank, the Federal Reserve and get back on a currency that is actually backed by metals like gold and silver. This would force government to be responsible in its spending.

    Currently, if there's not enough money, they just print more, which is irresponsible because our kids will have to pay back the "imaginary" money at an interest.

    The system is set up so that most of us are forced to continue working for much longer than we really have to.

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