Anonymous
Anonymous asked in Social ScienceEconomics · 1 decade ago

do you think a tax cut for people under 24 would help the economy? read on please?

I've been researching ways to help alleviate the terrible economy in California. A friend of mine pitched an idea entailing that if we gave young people (i.e under 24) a tax cut or even a moratorium on taxes, they would pump those savings right back into the economy. He said that young people don't save and often don't have too many responsibilities, such as a supporting a family. With the money they save on taxes, they would just spend that money and support businesses.

Summary:

1. Give people under 24 a tax break or even a moratorium on taxes

2. They don't save so they would spend it right back into the economy

3. The economy would be stimulated more than if the government collected that money in taxes

Now this is not the key to ending the financial crisis in California, but something small that could help. What's your take?

2 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    ROTFL

    1. Tax cuts are not a very efficient way to deliver economic stimulus. Food stamps, extending unemployment benefits, infrastructure improvements (roads, earthquake protection, etc.), even just giving more money to the states for normal operation (or, in California, to the schools) are far more effective, on a dollar per dollar basis than tax cuts.

    http://www.economy.com/mark-zandi/documents/Econom...

    2. People under 24 don't earn very much. Most don't even earn enough to pay taxes. Compare the data for people over 18:

    http://pubdb3.census.gov/macro/032006/perinc/new02...

    with the data for people over 25 and over to get the income for those between 18-25

    http://pubdb3.census.gov/macro/032006/perinc/new03...

    Wikipedia doesn't bother listing incomes below 25:

    http://en.wikipedia.org/wiki/Personal_income_in_th...

    • Login to reply the answers
  • 1 decade ago

    One other thought on this: If folks under 24 pay less in tax, how much of that will actually go into the California economy. How many will travel or buy things online from companies domiciled outside of California?

    • Login to reply the answers
Still have questions? Get your answers by asking now.