samuel3578
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- Oct 30, 2010
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Republican always suggests cut tax, reduce market intervention to help the economic recovery. Theatrically let the market allocate resources is the best, however, under the situation nowadays, it may not true.
People will aim at higher revenue in normal situation. If the government cut tax, will they spend money and help recover the economy?
To individuals, even if the taxes being cut, they may not spend money if they think the future is pessimistic. The cost for spending is higher than what than the benefit. It cannot help the economy. Rich people may use money to invest oversea. It cannot help economic recovery. Actually, it is common for those people to invest oversea.
To businessman cut tax can reduce their cost, but it does not equal that they are willing to employ more people or increase investment. If they found employer can finish works, there are no reason for them to employ more people even the tax are cut. It cannot help to decrease the unemployment rate.
Cut tax is also a cost to country. It is an explicit expenditure to nation. In long term, the government income decrease, it increases the difficulties for them to repay those debts. Everyone care for our revenue, so it is a must for us to against the government to raise taxes at that time. Take a look at Greek. It may create other confident cries that time, such as the debts may slow down country economic cries. It is not suitable for a country with large amount of debts to cut tax.
In most of the situation, market is the most efficient way to allocate resources. However it is the situation that the resources should mainly focus on recover local economy, even they may not be most efficient. That’s why the government current policy and plans for build more role, having more government lead economic plan are most suitable. Republican suggestion is not the best way to help economic recovery.
People will aim at higher revenue in normal situation. If the government cut tax, will they spend money and help recover the economy?
To individuals, even if the taxes being cut, they may not spend money if they think the future is pessimistic. The cost for spending is higher than what than the benefit. It cannot help the economy. Rich people may use money to invest oversea. It cannot help economic recovery. Actually, it is common for those people to invest oversea.
To businessman cut tax can reduce their cost, but it does not equal that they are willing to employ more people or increase investment. If they found employer can finish works, there are no reason for them to employ more people even the tax are cut. It cannot help to decrease the unemployment rate.
Cut tax is also a cost to country. It is an explicit expenditure to nation. In long term, the government income decrease, it increases the difficulties for them to repay those debts. Everyone care for our revenue, so it is a must for us to against the government to raise taxes at that time. Take a look at Greek. It may create other confident cries that time, such as the debts may slow down country economic cries. It is not suitable for a country with large amount of debts to cut tax.
In most of the situation, market is the most efficient way to allocate resources. However it is the situation that the resources should mainly focus on recover local economy, even they may not be most efficient. That’s why the government current policy and plans for build more role, having more government lead economic plan are most suitable. Republican suggestion is not the best way to help economic recovery.