1 Cut capital gains to zero for let say 5 years in targeted areas like real estate, alternative energy and infrastructure. There is 8 trillion on the sideline and will remain there if there is no incentive for investors to assume risk. 2 Slash corporate income taxes, let business decide to spend the money using maximum efficiency to create new jobs. 3 Cut government programs and reduce the size of the federal budget. The politicians hate this cause they don't get to decide how to use our money and thus can't take credit when the economy recovers. These things would work wonders for the economy over any trillion dollar pork stimulus the government can come up with. Anyway you guys can continue slinging partisan poop at each other in order to make arguments on who is worse the Republicans or the Democrats?
There's several fundamental problems here kid. First off, it's a proven fact that, dollar-for-dollar, tax cuts don't provide the same stimulus/multiplier effect that spending does, because tax cut recipients don't consume, they save. For every dollar on tax cuts, you only get less than a $ of spending and hence stimulus. Not smart. Secnd - corporations already employ a vareity of tactics to pay very very low tax rates here, you can't squeeze blood from a stone. Third - and perhaps most absurd- - you propose to balance out/erase the stimulus by cutting spending. Dumb, dumb and dumber. In conclusion - EPIC FAIL.
This is one of those ideas that sounds great in principle - but doesn't work in reality. Sure, you'll get additional investment in these areas. But at the same time, people will pull money OUT of the areas that don't get that benefit - because now they are competitively worse investments. That just creates a massive distortion in the market that does as much damage as it does good. This doesn't work if there's no demand. If my company suddenly pays less in taxes, I'm going to pocket the profits - or I'll invest in machinery to cut my labor costs (ie, reduce employment). I'm not going to hire more people or expand by business because the demand for my product hasn't changed. The only reason I will hire more people is because I can't keep up with my demand. If you get money into the hands of my customers, then I don't need a tax cut to grow my business. What programs would you propose cutting? And how exactly does that cut stimulate the economy?
how about, in memorial to Geithner, Daschle, Rangel, et al, we tell the IRS there will be no audits for those making less than $250k for the next couple of years.
The max you can technically get from tax cuts is around 1-1 ratio, but what about all the waste when trying to pass good spending bills. With the state DC is in now, it costs us so much in crap that offers almost 0 stimulus just to get anything passed. This probably makes it less worthwhile than tax cuts.
I like your plan. Lower taxes and less government spending, sounds simple enough. You will be bashed repeatedly by the liberals that hang in this forum. I can only conclude that: 1. they like taxes 2. they don't make enough to pay taxes and thus benefit from the gov't more than I do 3. they like gov't debt 4. maybe they just like gov't and LOTS OF IT I don't like anyone telling me how to spend my money or live but some people do. I will have to agree that this plan may not be the quickest stimulus package but I still like it.
Let me see can you remind me how the last round of Government Stimulus went circa early 2008? We are trying the same failed method again but with more money this time around. Also how are you fixing the economy and specifically the real estate problem with the current proposal? Will the government buy up all the foreclosed homes to stabilize prices? Government can't fix every part of the economy. No it can only provide people INCENTIVE to spend their money again. You think tax cuts are inefficient then go back to the early 80s and look at how Reagan pulled us out of a recession, inflation and high unemployment though the same tax cuts you so easily condemn. Stimulus is not stimulating anything until business create jobs that are self-sustaining in the long term. Anything other than that is only putting people on government payroll to hide inefficiency resulting from bureaucratic central planning. The idea that you can solve an economic crisis resulting from too much borrowing and leverage, with more borrowing is an EPIC FAILURE. There will a day of reckoning and the US dollar will pay the ultimate price.
all these republicans getting religion about spending responsibly is hilarious. I'm trying to ignore it not to be petty, but then you get a post like that, and I'm like, are you only five years old. did you notice the last eight years.
Flat out wrong. That was almost entirely tax rebates and business incentives. This stimulus bill is not anywhere close to trying the same method... which did fail because the only thing that could get through the Repub opposition in the Senate and get Bush's signature was something that would fail because they are so wedded to ideology that they are incapable of looking at the empirical data and doing what works... and we all know if you approached it that way, Dems would get credit because they are the more sane party right now, so Repubs must ensure national failure to spite the Dems.
Capital Gains taxes are at 0% for a lot of people, and I don't think those people are investing. The interest, dividends, and increase in value is your benefit for the risk. I really don't think the Capital Gains tax is the problem. I'd rather see RMDs removed permanently. Don't force people out of the market. Tax Cuts work to stimulate the economy. It has been proven. Large government spending, not so much. Our problem is benefit vs. cost right now. Cutting the corporate rate leads to investment. The company won't hire more employees, but they will buy new equipment, new fixtures, spend more in R&D. This will increase jobs. Don't collect FICA to increase the money people have in their pockets. People will spend the money if they have it. It is a hard decision between what to do. Unfortunately you will have to raise taxes back, which nobody ever likes. You have to find a way to avoid the massive debt increase and eventually start paying it down. I personally don't see how we eventually pull it off. The American people and the government forgot that once you go deep in debt, it is hard to pull yourself off the ground, and there is no rainy day fund.
this all hogwash, times are rough but find me one other country that has a 93% employment rate. The media is so doom and gloom its scaring people from spending to stimulate the economy. Seriously over the last 20 years our population has boomed and with it the total number of employed people has risen steadily.So now maybe percentage wise its not up to par, but overall we've added plenty of jobs and are now trimming the fat off the edge and dumping the worthless jobs.
More like it makes you sound like a simpleton, as it evidences a fundamental lack of understanding of the concept of a demand stimulus and Introductory Macro and has no place in the discussion.
Do you have any math on this? Because what I've seen indicates the oposite. Here's some math on the stimulus effect of tax cuts vs. spending in terms of GDP multiplier: http://www.econbrowser.com/archives/2008/10/pocketfull_of_m.html The tax cut ones (other than the rebate and the payroll tax cuts) are all worth less $ than they cost, while the spending ones are worth more in terms of multiplier.
Government failure in general is now being credited to partisanship. When politicians fail they all fail at the same rate, Democrat or Republican. Will the Democrats take responsibility for the now failed TARP bailout? Are why going to play politics all day or find real solutions? I am telling you what I believe works the best without any mention of party preference and you keep coming up with more political junk.
Your logic is horrific. Just bad instincts on display, folks. This is what happens when lawyers try to impersonate financial pro's. What are the two fundamental problems in this financial crisis? 1. Investor Confidence 2. Liquidity What happens if the capital gains tax is cut? A simple NPV analysis on cash flows says that stock prices will go up. That upward movement in stock prices will help shore up investor confidence, create a wealth effect (which impacts spending), and help at least in part to increase liquidity by making an equity offering an attractive alternative again. You then go on to demonize savings. Sam, savings represent assets on banks' balance sheets. Don't ya think they could use a few more deposits these days? In case you haven't read the WSJ in several months, virtually every bank in the nation is starved for capital. Perhaps the acronym TARP rings a bell. Increased capital bases will help stimulate lending. That will help solve the liquidity crisis. Get a clue.
LOL Investor confidence, maybe people like to invest in companies that they know are going to perform. This is classic denial about this problem. Investors aren't scared of making money and paying taxes, they are scared of losing money in companies because our economy can't go the way it has been for 20 years. On a fluffed up housing market, and consumer debt out the wazu.
