Does raising taxes reduce inflation?

[Care4all]

And yet Schumer wants to reduce taxes on the wealthiest by giving them a bigger SALT deduction.

Ever hear of the term stagflation? Economic growth gets stalled but inflation doesn't, they ain't always in lockstep with each other. We have to find a way to reduce inflation without reducing economic growth as much, and raising taxes on the rich and big corps doesn't do that. Investments and innovation are curtailed and that ain't good for any economy.

The basic answer to the inflation problem is to stop gov't spending so God Damned much money that we ain't got. At it's heart inflation is all about too much money (demand) chasing too few goods and services (supply). We've been pumping so much free money over the past couple of years without the corresponding increase in production.

The basic answer to slow economic growth without more inflation is to make it easier and cheaper to produce stuff. IOW, let supply catch up to demand. But you gotta stop pumping money into the economy. I don't think raising taxes helps in that regard.

Well, raising taxes back to where they were for the wealthiest/corporations, will slow the economy....so I disagree with you that it wouldnt.....

But is that how we really want to do it? That's definitely a debatable topic.

Yes, the two or so stimulus checks under Trump and the one stimulus under Biden, definitely contributed to inflation as well!!!! When the economy woke, every day people had money to spend, without the supply to meet their demands.

And honestly, I don't want to give our stimulus checks back!

 

[Big Bend Texas]

Well, raising taxes back to where they were for the wealthiest/corporations, will slow the economy....so I disagree with you that it wouldnt.....

But is that how we really want to do it? That's definitely a debatable topic.

Yes, the two or so stimulus checks under Trump and the one stimulus under Biden, definitely contributed to inflation as well!!!! When the economy woke, every day people had money to spend, without the supply to meet their demands.

All that would do is to reduce any growth in the job market. That's not a plan for economic recovery.

 

[task0778]

The thing about inflation is that it means there's too much money out there and/or too little production of goods and services, some combination of those 2 basic things. So - if you raise taxes you aren't changing the amount of money in circulation; sure you got the student debt people spending more money that would've gone to pay their student, loans, but on the other hand you got taxpayers paying more in taxes that THEY would've spent or invested. So, it's pretty much a wash as far as inflation is concerned, some people get helped and other people get screwed cuz they're paying somebody else's debt. BUT - anytime you raise taxes you are hurting the economy cuz people have less money to spend and you also get less investment and innovation.

Bottom line: raising taxes is a good idea when you want to cool down a hot economy, but I don't think inflation is moderated much if at all. It's also a good idea if you are a big spending democrat trying to get re-elected cuz raising taxes will generally increase gov't revenue. But the rest of us, not so much.

 

[Big Bend Texas]

So - if you raise taxes you aren't changing the amount of money in circulation;

Yes you are since you'd be reducing the net pay in people's paychecks because that increase would be calculated in.

 

[HandleTheTruth]

Senator Chuck Schumer (D-NY) said that the way to reduce inflation would be to get rid of the Trump tax cuts.
"If you want to get rid of inflation," Senator Schumer said, "the only way to do it is to undo a lot of the Trump tax cuts and raise rates."

https://www.realclearpolitics.com/video/2022/04/27/senator_chuck_schumer_get_rid_of_the_trump_taxes_to_stop_inflation.html

Comment:
How does raising taxes reduce inflation?
If Schumer really wants to raise taxes, then he should bring back Trump's SALT deduction maximum.

It's never made inflation go up. Are you saying record tax breaks hasn't created inflation?

 

[Big Bend Texas]

It's never made inflation go up. Are you saying record tax breaks hasn't created inflation?

Mild increases in growth that were needed yes, but inflation, no.

 

[HandleTheTruth]

Mild increases in growth that were needed yes, but inflation, no.

Why is access spending causing inflation only a government thing. Why isnt access spending by the wealth a inflationary prospect?

 

[task0778]

Yes you are since you'd be reducing the net pay in people's paychecks because that increase would be calculated in.

Yeah, but gov't spending goes up accordingly. Taxpayers have less to spend but the gov't makes up for it. It'd be different if Congress was paying down debt, but they ain't. Sure as shit, when they raise taxes they also raise spending so I'm not seeing the amount of money out there as changing.

 

[Big Bend Texas]

Why is access spending causing inflation only a government thing. Why isnt access spending by the wealth a inflationary prospect?

This sentence doesn't make any sense at all. How about a rewrite?

 

[Big Bend Texas]

Yeah, but gov't spending goes up accordingly. Taxpayers have less to spend but the gov't makes up for it. It'd be different if Congress was paying down debt, but they ain't. Sure as shit, when they raise taxes they also raise spending so I'm not seeing the amount of money out there as changing.

There's no evidence of that. Gov't spending seems completely detached from increases in revenue.

 

[HandleTheTruth]

Yeah, but gov't spending goes up accordingly. Taxpayers have less to spend but the gov't makes up for it. It'd be different if Congress was paying down debt, but they ain't. Sure as shit, when they raise taxes they also raise spending so I'm not seeing the amount of money out there as changing.

Even when they reduce taxes they increase spending. Just look at the last two tax cuts under republicans. They never cut spending creating more debt.

 

[HandleTheTruth]

The simple fact is only democratic presidents have cut deficits. In the last forty years.

 

[Big Bend Texas]

Even when they reduce taxes they increase spending. Just look at the last two tax cuts under republicans. They never cut spending creating more debt.

You're pretending that dem's have no input on federal spending. We all know that isn't the case.

There's been no point in the last sixty years where democrats did not have at least some say on spending.

 

[Big Bend Texas]

The simple fact is only democratic presidents have cut deficits. In the last forty years.

No, that isn't true. It isn't remotely true.

 

[HandleTheTruth]

You're pretending that dem's have no input on federal spending. We all know that isn't the case.

There's been no point in the last sixty years where democrats did not have at least some say on spending.

Your pretending that the right wing cuts deficits or debt when they are president.

 

[Big Bend Texas]

Your pretending that the right wing cuts deficits or debt when they are president.

I made no such assertion at all.

The only reductions we've had in spending were when republicans had at least marginal control of both houses.

Presidents are a very small part of the taxing and spending equation. They can send a suggested budget to congress but congress has to pass the budget. The president can veto it and they start over but that is done extremely rarely at least over the last six decades.

 

[HandleTheTruth]

I made no such assertion at all.

The only reductions we've had in spending were when republicans had at least marginal control of both houses.

Presidents are a very small part of the taxing and spending equation. They can send a suggested budget to congress but congress has to pass the budget. The president can veto it and they start over but that is done extremely rarely at least over the last six decades.

Yeah under a democrat president that signed the bill. Now show me a republican president that spending didn't sky rocket after cutting taxes. Go on.

 

[HandleTheTruth]

Now I'll give a dollar to any Republican that can show me that tax cuts didn't add trillions to the debt after tax cuts.

 

[Big Bend Texas]

Yeah under a democrat president that signed the bill. Now show me a republican president that spending didn't sky rocket after cutting taxes. Go on.

Again a false premise. Presidents don't pass the budgets, they have very limited impact on the budget process.

When cuts are made the "pay off" is always seen in subsequent years because they are not retroactive.

 

[Big Bend Texas]

Now I'll give a dollar to any Republican that can show me that tax cuts didn't add trillions to the debt after tax cuts.

They don't and can't.

How much is spent cannot be shown to be limited by the revenues raised.