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I heard that as an alternative to the stimulus spending package, the Fed could simply have a tax holiday from March 1 to August 31. 6 months of no personal income taxes. As the stimulus package goal is to stimulate the economy and create jobs, wouldn't putting all that money directly back into the economy be better than having the government spend it?
Tax cuts isn't going to do it (at least not alone). Tax cut money that is simply sat on (which is what people do when they are frightened) will do absolutely nothing to stimulate the economy.
Every $100,000 spent buying a Sanyo, Sony or Samsung big screen tv will generate how many American jobs?
Ask the unemployed Circuit City employees... We can go protectionist with the products but that hurts the overall economy. Heck, the jobs that the stimulus spending package are going to create/save are not limited to American citizens. The "buy American" and "hire American" provisions were removed from the stimulus spending bill...
Tax cuts isn't going to do it (at least not alone). Tax cut money that is simply sat on (which is what people do when they are frightened) will do absolutely nothing to stimulate the economy.
Ken
Tax cut money that is invested will help the economy. Tax cut money that is saved will help the economy.
100% of tax cut money will be spent, saved or invested. When the money goes to DC, how much is lost due to pork and the overhead of government....
Tax cut money that is invested will help the economy. Tax cut money that is saved will help the economy.
100% of tax cut money will be spent, saved or invested. When the money goes to DC, how much is lost due to pork and the overhead of government....
No, money that is saved will NOT help the economy - at least not in the immediate run - that's been the problem with the bank money that was given out. The banks are simply sitting on it so it's it's not circulating nor helping the economy. Once it finally begins circulating THEN it begins helping the economy. Same is true at the individual level. While it IS true that we have not been saving enough money as individuals, right NOW that's not the problem. The immediate problem is that people are not spending money because they are frightened. Saving money on a regular basis is a lot different from refusing to spend money because you are scared. Saving money on a regular basis is good for the economy (and America as a whole). Refusing to spend because you are too frightened to spend simply leads for further panic and downward spiraling economy.
This is why it's the GOVERNMENT that NEEDS to spend money. Then must get out into the economy rather than just sitting in a bank's balance sheet.
The argument that money is lost due to "pork" and the "overhead of government" - and therefor will not stimulate the economy is pure nonsense. Money spent on "pork" or "overhead" is STILL money spent. It provides jobs for people and economic stimulus. I would certainly rather see the money spent on "worthwhile" projects that produce something of permanent value (of course one person's "pork" is another person's "worthwhile project") but the truth is, to get the economy moving again either one will have an effect. You seem to think that because it's "pork" or "government overhead" it doesn't make it's way into peoples' paychecks. So what exactly DOES happen with that money?
I put down 6 months as well, but I think that 2 years without any income taxes would do more for the economy that any stimulus package.
Agreed.
At least lower the income tax for the middle class 5 to 10 percentage points.
Maybe it will stimulate someone to buy an RV from Elkhart.
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