Tax Cuts

Topics: Taxation, Ronald Reagan, Democratic Party Pages: 1 (359 words) Published: November 16, 2010
One of the most well respected Democratic presidents in history, John Kennedy, stated in a 1963 speech on fiscal responsibility: This Government considers our tax reduction and reform program"�to be the most important action that Congress can take now to improve our long-range position. Another Bush proposal to end the double taxation of dividends from corporations will encourage companies to issue dividends to their stockholders. There are many other statistics that emphasize the benefits of the Reagan tax cuts, but the few listed above show the advantages of what cutting taxes can do for the economy. Therefore, it is impossible to design a tax cut of any size that would appear to only benefit the poor. The idea of tax cuts stimulating the economy is hard to prove in the same way as any other tax plan, because there are many other factors involved, including the process of measuring the long term effects. The central concept of supply-side economics is that cuts in the tax rates spur economic growth by providing entrepreneurs an incentive to invest the extra tax dollars saved by tax cuts, causing many of them to earn more money and pay more taxes on their earnings, even at a lower tax rate, which creates new jobs. Debates over tax cuts are usually divided between democrats and republicans. It is not always important exactly how the tax cuts are distributed, as long the result is stimulating growth. Democrats claim that the majority of the benefits from tax cuts go to the rich. Any realistic plan to substantially stimulate the economy with tax cuts must be aimed at the wealthy. As if that is not enough, local and state governments tax the money again when it is spent. Accelerating the implementation of already approved tax cuts and eliminating the marriage penalty are two proposals that will have an immediate impact on the economy. There is simply not enough money there to have an effect on the economy. Admit it or not, when the wealthy are encouraged to invest...
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