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Forums - General - How effective are the Bush tax cuts at creating jobs?

It's common sense cutting taxes decreases unemployment though.

There is a lot of risk in starting a buisness or even just an expansion of your workforce.

Whether or not you do so is based on Risk vs reward obviously.

Money in Chance of losing it  VS  potential return.

Everyone has a differnt forumla risk reward wise... but one thing is for sure.  Lowering taxes  raises the potential return.  Therefore causing more people to go through with expansion.

To say it doesn't help, is crazy and looking to far to where you miss the forest from the trees just to  try and justify a political point.  You just need to see where the other variables are moving as well.  The only problem is, the other variables are generally unmoveable.   You can't really mitigate risk effectivly, and costs... unless you want to cut minium wage....

 

Once people adjust to the new reality of where such profits are common and to be expected, it loses its effectiveness long term.

Just how tax raises evenetually become common place eventually as a new group of investors enters the field.  The young guys will gladly invest and take less profit because they don't really know any better.



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I may be mistaken but I believe research has shown, despite a lot of claims to the contrary, that cutting taxes rarely leads to the creation of more jobs. Especially if taxes are cut for the upper income brackets. But I'm too lazy to go and find out whether my recollection is correct or not.



“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell

"When the power of love overcomes the love of power, the world will know peace."

Jimi Hendrix

 

So who wants a flat tax system to apply from the first dollar they earn? Personal income tax rates remain the same regardless if you earn $1 or a big company that earns $1, 000,000,000, 000 . 

Maybe a flat personal tax rate in line with company tax rates? Everyone small guy or big multinational corporation pays the same rate of tax with no discrimination. Real equality, everyone  pays the exact same flat tax rate. 



All I know is that nobody want's a tax increase. If you were rich,would'nt you want to keep more of the money that you earned. Just because your rich and have money,doesn't mean that you would want to give it away. I think that they should extend the tax cuts for at least 1 yr.



binary solo said:

I may be mistaken but I believe research has shown, despite a lot of claims to the contrary, that cutting taxes rarely leads to the creation of more jobs. Especially if taxes are cut for the upper income brackets. But I'm too lazy to go and find out whether my recollection is correct or not.

If your too lazy to even find the articles you may not as well even posted... I mean, after finding the articles you really gotta dig through the data to see if they've actually studied anything or just did what Richard did in the OP.

You don't really need to do research at all to know if tax cuts do or do not create jobs.

They just do, based on about the simplistic logic available.

The only real question is it worth it to cut taxes to create said jobs.



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This analysis says nothing because there are far too many factors that haven't been accounted for; and the timeline is too short with arbitrary start and end points. To understand what I mean just consider the real-estate bubble that began inflating in the Clinton years and continued through the Bush years, and finally burst right at the end of G.W Bush's last term; there is no reference to how many jobs were "created" or crowded out by this bubble, and you have provided no argument for the level of influence Bush's tax cut policy made in isolation from this bubble.

 



There is a general approach all individuals and organizations use when they're faced with higher costs; regardless of whether this cost is increased rent or increased taxes.

  1. Avoid the increased cost
  2. Pass on the increased cost
  3. Cut costs elsewhere to compensate for the increase in costs

If someone wants, I can provide detailed examples of how each of these operates.

Every last one of these approaches has cascading consequences which compound in effect through the economy and act as a drag on economic growth and job creation. To a certain extent this can be balanced out if the increase in cost is for a project which translates into economic growth and job creation, but these kinds of projects are very rare from governments.

 

 

 

With that said, George W. Bush never actually cut taxes because in order to cut taxes you have to cut spending proportionately; otherwise any reduction in taxes paid today will come with higher taxes paid for longer with fewer benefits in the future.

 

 



HappySqurriel said:

This analysis says nothing because there are far too many factors that haven't been accounted for; and the timeline is too short with arbitrary start and end points. To understand what I mean just consider the real-estate bubble that began inflating in the Clinton years and continued through the Bush years, and finally burst right at the end of G.W Bush's last term; there is no reference to how many jobs were "created" or crowded out by this bubble, and you have provided no argument for the level of influence Bush's tax cut policy made in isolation from this bubble.

 

I believe the real estate bubble happened after the dotcom bubble, as money began to seek out the next investment opportunity and piled into the real estate sector with far too much funds.  This then fed on itself.

Anyhow, in regards to this, there is a question, and it is fundamental to economics on where the money should go, to handle situations that aren't in anyone's control.



richardhutnik said:
HappySqurriel said:

This analysis says nothing because there are far too many factors that haven't been accounted for; and the timeline is too short with arbitrary start and end points. To understand what I mean just consider the real-estate bubble that began inflating in the Clinton years and continued through the Bush years, and finally burst right at the end of G.W Bush's last term; there is no reference to how many jobs were "created" or crowded out by this bubble, and you have provided no argument for the level of influence Bush's tax cut policy made in isolation from this bubble.

 

I believe the real estate bubble happened after the dotcom bubble, as money began to seek out the next investment opportunity and piled into the real estate sector with far too much funds.  This then fed on itself.

Anyhow, in regards to this, there is a question, and it is fundamental to economics on where the money should go, to handle situations that aren't in anyone's control.

Actually the real estate bubble started during the dotcom bubble.