Anonymous
Anonymous asked in Politics & GovernmentPolitics · 10 years ago

Would USA's economy get better if we make income taxes higher?

My theory on income taxes is that if you raise taxes on the rich, they will work much harder to make the money back they are losing in taxes.

This is good for everybody because then they will not only be MORE productive and work harder, we can redistribute that wealth to poor people on the streets, who can then buy things to HELP rich people who sell things to get more sales.

Also the US Government can also use that money to build things for the greater good of everybody.

I also think we can raise interest rates MUCH higher and then the poor people who are receiving Government money would also re-invest that money in the banks at high interest returns,

and the banks would then reinvest it in corporations who will be working much harder to recover the fact that taxes are higher, which will result in BIGGER returns,

and so the economy will boom!

13 Answers

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  • Anonymous
    10 years ago
    Favorite Answer

    Why does everyone refuse to look at history. History has shown that when the government lowers the tax rates, the revenue increases, more money coming into the government. When the government raises the tax rates, revenue drops, less money comes into the government. When the government lowers the tax rates, unemployment goes down. When the government raises the tax rates, unemployment goes up

    Source(s): History, why does everyone ignore it?
  • pdooma
    Lv 7
    10 years ago

    "Tax hikes. Most experts say it’s not a question of whether taxes will go up in the United States, it’s more a question of when. The Bush tax cuts will expire at the end of the year. If they lapse, taxes will go up. Research has shown that there is a 3 to 1 ratio that can be applied to how tax hikes affect GDP growth, according to Arnott. For instance, if taxes go up by 1 percent of GDP, then GDP will fall by 3 percent. When the tax cuts expire, Arnott says, that will be equivalent to a 2 percent jump in taxes as a percentage of GDP. That means GDP growth next year should be 6 percent lower than it would be without the tax hike. “So that is really the big issue that we think creates a catalyst which can make a second dip pretty high odds and reasonably imminent,” he says."

    http://schuylerthorpe.wordpress.com/2010/07/06/8-s...

  • 10 years ago

    If you just tax the rich you'll get some money, they don't really work harder though, because they don't need to to get money.

    If interest rates went high, we would just keep inflating our money, and we would be staying where we are, if not digging the hole deeper

    our news though could be a bit more helpful. Hearing "and the market keeps getting worse" doesn't make us feel good about investing in the stock market, but that's what we need.

  • BruceN
    Lv 7
    10 years ago

    No. Simple Economics: Low tax + High spending = good economy + high deficit. High tax + Low spending = bad economy + low deficit. The trick is to keep it somewhere in the middle, with the government acting to counter balance the cyclical market trends.

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  • 3 years ago

    lovable, yet fake analogy. at first, the gang hasn't had sufficient funds to pay the bill on condition that bill Clinton became President. there became NO $20 alleviation interior the bill. in fact, the cost went up. yet Bush, Inc desperate that one guy incredibly had to have his share cut back. Now the 5th, 6th, seventh, 8th and 9th guy even have been given small rate reductions of their share. the gang then had to borrow funds from their descendants to make up the version. We "evil" liberals could merely like the 10th guy to pay the right same quantity he paid under bill Clinton so the gang does not could borrow as plenty. Oh, and that 10th guy. the guy who paid $fifty 9 for his share of the meal? He actually approximately made $sixty seven of each and every of the earnings earned by utilising the gang in the process the years 2002 by 2007. ordinary that he's barely paying fifty 9% of the bill, eh?

  • 10 years ago

    Well... 50% of the people would still not pay their taxes. And giving more money to the government is not a good idea.

  • Anonymous
    10 years ago

    We have lots of empirical data that contradict your theory. Tax increases reduce economic activity, and tax decreases increase economic activity. However, economic theories are fun to dream up. Here is one for you: we could eliminate poverty by taxing poor people at a rate of 100%. Then they would either die or work harder to get into a lower tax rate. In either case, the poor would disappear.

  • Anonymous
    10 years ago

    I don't like the idea of living in such a nation. The poor and rich should be equally taxed.

  • 10 years ago

    LOL I am glad you have no say.

    When you raise the interest rates the government is going to be in more trouble because they have to pay interest on the trillions they have borrowed.

  • Jo
    Lv 7
    10 years ago

    Time to take a remedial economics class.

    While you're there sign up for a psychology class also.

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