Cutting tax increase inflation the same way a higher minimum wage does?

[C R O I X]

Just to make it clear. I really don't know if cutting taxes has any impact on inflation. I am just rising the question.

If you believe in the theory that is the money supply the impacts inflation, than you will agree that taxes has nothing to do with inflation.

But if you believe consumption (and not supply of money) is what influence inflation, than you will tend to agree that anything that influence the rise or lower consumption will influence inflation. It means that is cutting taxes leave more money in consumers pockets leading them to consume more goods and services, it will rises inflation.

Of course that cutting taxes does not always means consumers will spend more money. But I believe that is the consumption of good and services the influence of inflation and not the quantity of money in the economy.

I think people mistake the quantity of money in the economy as related to inflation because government spending more than often means printing money. But is the government spending that is rising inflation ether the government print more money or not. The rise of prices is related to the quantity of goods and services in the market available and its demand. The higher the demand for a good and less quantity of such good in the market (caused by higher consumption), the higher will be the price.

Relating inflation to just the quantity of money in the market is an unrealistic over simplification in my opinion.

 

[HowardBThiname]

I think you are being dishonest here. I never suggested that one shop or one touristic area has inflationary impact in the entire big country such the US, Canada or China. It is obvious that one touristic area or a single shop does not impact in the national economics. But it also should be obvious that I am just using these small scale examples because the effect of spending on prices is more clear.

I think you're the one being dishonest. Everyone knows that prices are higher in trendy, tourist areas, but you tried to use that as an overall economic example, and it's not -- it's a localized effect. The problem with you using those small examples is that they don't have any affect outside the individual examples, and you're trying to hold them up as having a larger effect. They are simply examples of the free market at work.

You can still disagree that people spending more money has no influence business rising prices. It is possible that other factors in a national level allows that people have more money to spend and prices still keeping low. But you haven't shown any argument or example that explain it yet.

The problem here is still that you're trying to shove huge economic indicators into a tiny little bottle. That doesn't work. Many factors are at play, including demand for a specific service or product, demand for workers, regional wages, and competition in the marketplace. Those factors have a lot more to do with whether businesses raise their prices. You're using a very narrow-minded view that excludes the most important factors and trying to convince others that your small factor is a leading factor. It simply doesn't work that way.

It is fine to disagree, but don't start blame and judge me with false causation, saying that I am "moving goalposts in an attempt to salvage something of my argument", just because you don't have argument to exemplify your disagreement.

You may be right when you say I am comparing apples and oranges virtually every time I post. But again, without any real argument and explanation it is just a empty frustrate blame.

That's how it feels from where I sit. Every time I explain how there's more to the equation, you attempt to use a small example to represent a larger issue. That's just not intellectually honest. I've answered you completely and fairly, yet you keep trying it.

It is obvious that wages and employers offers is not the single thing that is related to successful business. I never said what make a successful business and that is not the point of what I wrote.
I have administrated a metallurgic by the way, so I know what it takes to run a business.

Perhaps the language differences are presenting some of the problem, but your original question was whether tax cuts increase inflation.

The answer is NO.

 

[HowardBThiname]

If you believe in the theory that is the money supply the impacts inflation, than you will agree that taxes has nothing to do with inflation.

But if you believe consumption (and not supply of money) is what influence inflation, than you will tend to agree that anything that influence the rise or lower consumption will influence inflation. It means that is cutting taxes leave more money in consumers pockets leading them to consume more goods and services, it will rises inflation.

Or -- you could believe that both monetary supply and consumption are factors in inflation, IN ADDITION to other factors.

That's the thing about human brains -- they can analyze complex situations -- they don't have to focus on a single limited idea.

 

[C R O I X]

I think you're the one being dishonest. Everyone knows that prices are higher in trendy, tourist areas, but you tried to use that as an overall economic example, and it's not -- it's a localized effect. The problem with you using those small examples is that they don't have any affect outside the individual examples, and you're trying to hold them up as having a larger effect. They are simply examples of the free market at work.



The problem here is still that you're trying to shove huge economic indicators into a tiny little bottle. That doesn't work. Many factors are at play, including demand for a specific service or product, demand for workers, regional wages, and competition in the marketplace. Those factors have a lot more to do with whether businesses raise their prices. You're using a very narrow-minded view that excludes the most important factors and trying to convince others that your small factor is a leading factor. It simply doesn't work that way.



That's how it feels from where I sit. Every time I explain how there's more to the equation, you attempt to use a small example to represent a larger issue. That's just not intellectually honest. I've answered you completely and fairly, yet you keep trying it.



Perhaps the language differences are presenting some of the problem, but your original question was whether tax cuts increase inflation.

The answer is NO.

Once more, I never meant to suggest that local economics reflect the overall economy. What I meant is to demonstrate how higher spending influence higher prices.

And once more, I never meant to suggest that higher spending is the sole influence on prices or leading factor 100% of the time.

The higher spending suggest that there is a higher demand, and higher demand suggest that it will reduce supply through consumption unless business create higher supply, and the same effect go through between business and business suppliers, and business suppliers and material and structural resources.

You may be right when you say that cutting tax does not imply higher inflation since it does not necessary means that people and business will spend more.

But you don't have presented any argument to say that cutting tax has no influence at all in any case on inflation.

I respect you opinion any way. What I don't respect are false causation and blames for not knowing how to present arguments.

Or -- you could believe that both monetary supply and consumption are factors in inflation, IN ADDITION to other factors.

That's the thing about human brains -- they can analyze complex situations -- they don't have to focus on a single limited idea.

That is true. But based on the video analises printing money doesn create higher demand itself, but higher demand create more money in the market.

So you then believe that consumption has some influence in inflation after all?
But you don't believe cutting tax may influence on higher spending and therefore inflation?

 

[bluesmoke]

Read better.

Nowhere did I specify what the effect of reducing taxes on the rich and large corporations leads to. In fact, I specifically said that what employers choose to do with tax cut windfalls varied.

If you want to be in the discussion, I suggest you actually read what others write before you go off half-cocked.

You said:

“Tax cuts…always leads to economic stimulation and a more robust economy.”

I don’t see where in your post to which I responded did you “specifically” say anything to the effect that “what employers choose to do with tax cut windfalls varied.”. Maybe it was in a prior post. Any clarification would be appreciated. Nonetheless, it does not make a difference in what you said as, regardless of that point, being the “results” and “that always leads to” which you testify to.

What I parsed from your post and restated above I do not believe is out of context. I took your “tax cuts” to mean the same as the Trump plan because you did not stipulate anything otherwise. My question is quite appropriate whether to be the Trump plan or an overall tax cut, which would include upper-income earners and corps. Or, clarify what you mean because you otherwise did not let anyone know what you meant.

 

[HowardBThiname]

You said:

“Tax cuts…always leads to economic stimulation and a more robust economy.”

I don’t see where in your post to which I responded did you “specifically” say anything to the effect that “what employers choose to do with tax cut windfalls varied.”. Maybe it was in a prior post. Any clarification would be appreciated. Nonetheless, it does not make a difference in what you said as, regardless of that point, being the “results” and “that always leads to” which you testify to.

What I parsed from your post and restated above I do not believe is out of context. I took your “tax cuts” to mean the same as the Trump plan because you did not stipulate anything otherwise. My question is quite appropriate whether to be the Trump plan or an overall tax cut, which would include upper-income earners and corps. Or, clarify what you mean because you otherwise did not let anyone know what you meant.

I was addressing the subject of tax cuts for the average American.

Since there are far more middle earners than upper earners, a boost of spending power for those people gives the economy a boost. Let's say, perhaps, that upper earners don't really need additional expendable money -- that's okay -- what they get won't detract from what the middle-earners get and put into the economy.

Same with corporations -- like upper earners -- what they do with their share of the tax cuts may differ, but, again, it will not offset the benefit from the largest group of earners putting more money into the economy.

Just the fact that those earners have more expendable money will result in an economic boost that everyone will benefit from.