What would happen to the economy?

Discussion in 'Congress' started by SwingVoter, Sep 6, 2008.

  1. SwingVoter
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    SwingVoter VIP Member

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    if you :

    -raised the top tax rate to 39.6%
    -increased Medicare taxes
    -added 4 cents to the gas tax


    what do you think would be the likely effects?
     
  2. Toro
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    Toro Diamond Member

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    In a recession, it would exacerbate it.

    Over the long run, it would have little effect. In fact, given the size of the deficit, raising taxes to eliminate the deficit would probably help the economy since the US government wouldn't be competing for financing throughout the world, bidding up interest rates, which causes the cost of borrowing from everything for mortgages, cars and credit cards to rise.
     
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  3. editec
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    editec Mr. Forgot-it-All

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  4. del
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    del BANNED

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    "In the long run, we're all dead."-J.M. Keynes
     
  5. midcan5
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    midcan5 liberal / progressive

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    Little to nothing, it would depend on what the administration did with the additional income.


    "There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well."

    Tax cuts spur economic growth
     
  6. SwingVoter
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    SwingVoter VIP Member

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    These were Bill Clinton's tax increases in 1993, after which unemployment dropped.
     
  7. Red Dawn
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    Red Dawn Senior Member

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    Last time we increased the top marginal rate to 39%, in 1992, the economy boomed.


    I don't know who's proposing raising the gas tax, but this country needs 1 trillion dollars of improvements to our crumbling infrastructure, and somebody's got to pay for it. We can't keep borrowing money from the chinese.
     
  8. SwingVoter
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    SwingVoter VIP Member

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    also period of highest inflation, which fell along with unemployment when Reagan cut top rate from 70% to 28%
     
  9. SwingVoter
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    No one is now, those were all part of the 1993 Clinton tax package
     
  10. Toro
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    Toro Diamond Member

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    That's because the economy was coming out of recession.
     

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