Lv 4
? asked in Business & FinanceTaxesUnited States · 10 years ago

How would a tax cut COST money?!!?

To the government, taxes are INCOME. That would be a decrease in income, not expense. The cost would be the SOCIAL PROGRAMS. Someone please explain this to me. When you do please REMEMBER, tax=income and expense=spending.

3 Answers

  • .
    Lv 6
    10 years ago
    Favorite Answer

    I remember in one of my economics classes I learned that when the government spends to try to get out of a recession, it only makes it worse... it puts off the recession instead of getting it over with.

    What they should do is give tax cuts to small businesses.. So they can afford to expand their inventories, sell more products, hire more people, create more jobs... In the end it would have a much larger payout. Whereas government spending is spending money we don't really have, and pumping into something dead. It just doesn't help, it only makes it worse.

    So if tax cuts are given to the people who can create jobs... Then it doesn't cost money... it only helps the economy.

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  • Matt
    Lv 7
    10 years ago

    Well, unless the government cuts spending, then the tax cuts will cause borrowing to increase, which will end up costing money because we have to pay interest on our debt.

    We could cut spending on discretionary social programs, but they are just a drop in the bucket. Social Security and Medicare are not going to get cut. Military spending is not going to get cut (though it should). The discretionary spending which can get cut is just a drop in the bucket compared to the programs, like the unfunded Medicare drug benefit passed by Bush, which are not going to get cut.

    Giving away billions while saving millions is not going to balance the budget.

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  • 10 years ago

    Well if there is an DECREASE in income and no change in Expenditure, the situation becomes ever more dire, which results in printing more money, borrowing more money, and there is interest to pay on all that

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