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News-Sentinel.com Your Town. Your Voice.
Opening Arguments

Cut and run

Some of us believe that tax cuts stimulate the economy. Here is an opponent of tax cuts who, inadvertently, I'm sure, helps make the case for us:

But if they were repealed in a year, the Bush tax cuts could spur a burst of economic activity in 2008. If people knew that their tax rates were going up next year, they'd work to make sure that more of their income is taxed at this year's lower rates. Investors would likewise have a giant incentive to cash out their capital gains now to avoid paying higher taxes later. In 1986, stock sales doubled as taxpayers rushed to avoid the capital gains tax rate increase scheduled for 1987. If people pour their stock gains into yachts and fast cars, that's pure fiscal stimulus.

Get that? If people know taxes are going up (the practical effect of repealing tax cuts), they will engage in economic activity now, so as to avoid the effects of the increase. Of course, once the increase kicks in . . . but never mind that. So, if tax increases depress economic activity, tax cuts ... anyone, class, anyone?


tim zank
Thu, 01/24/2008 - 10:58am

Well, you didn't expect him to offer a solution for after next year did you?? That would be planning ahead, no need for that.

sarc/off again

Bob G.
Thu, 01/24/2008 - 12:44pm

Seems the Feds need to do more work with their "fiscal models" to understand ANY and ALL repercussions from this impending debacle.

(And they need to stop sniffing the GLUE as well)


(already got our $1600 earmarked)

A J Bogle
Thu, 01/24/2008 - 7:27pm

Well lets see we have had 7 years of supply side on steroids and Bush tax cuts and the economy is still in a tailspin - that really worked well didn't it.

The bottom line is investors will still invest, and consumers will still consume regardless of tax rates.

I have no problem with tax breaks for the wealthy if there are strings attached - how many us jobs did they create, how much US techology and infrastructure did they invest in - there should be no such breaks for shipping jobs and technology overseas or offshore accounts which is precisely what many a wealthy did with ttheir tax cuts

tim zank
Thu, 01/24/2008 - 9:30pm

Heh Heh Heh..."economy is still in a tailspin". Yep, 7 years of steady growth, one quarter of no growth. Yeah boy, that's a frickin' tailspin alright.

Seems the word "still" in your description would be inappropriate. You need to get out more, it's a big country out there and not everyone's in an economic tailspin, sorry about your luck.