- Thread starter
- #161
You really need to get better informed on things before you open your mouth to make a fool out of yourself.Yes, they will bring back high productivity jobs to the U.S., expanding our own tax base and eventually that means lower taxes across the board. We fully understand your abject horror at that outcome.
The long-term outcome of lowering taxes is uncertain, but it can have negative effects on the economy:
- Budget deficits
If tax cuts aren't financed by spending cuts, they can increase the federal budget deficit. This can lead to higher interest rates and reduced national saving, which can hurt economic growth.
- Crowding out private investment
Government borrowing to finance deficits can reduce the amount of capital available for private investment. This can reduce future productive capacity and the amount of future income that goes to US residents.
- Limited impact on saving and labor supply
Tax cuts may encourage people to work and save, but the impact is likely to be small. This is because the increase in after-tax returns is small, and saving and labor supply aren't very sensitive to tax rates.
What we learned from Reagan’s tax cuts