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Old 12-20-2017, 11:58 AM   #19
Shane
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Quote:
Originally Posted by JonBoy View Post
I'm all for a tax cut, so long as there's an equal spending cut to go along with it...problem is there isn't and this just further increases our federal deficit. I'll probably end up slightly ahead on this but I'd really like to see a pairing down in government spending across the board.
I'd LOVE to see massive government spending cuts as well. But your assumption about cuts in the tax rate automatically translating into higher deficits is assuming a zero-sum game where reduced tax rates have zero effect on the economy and people's and corporations' behavior. If that were true, and the only thing that changed after a tax cut was the percentage of all the income that the government took, then you'd be correct. But when people and corporations get to keep more of what they earn, then that incentivizes and allows more economic growth. The pie gets bigger. So even though the government is taking a slightly lower percentage of what we all earn, we're earning and creating more to start with. And the actual tax REVENUE the government takes in gets bigger too. It's possible, even likely, that deficits will decrease as a result of a tax cut, even without the cuts in government spending that should also be happening, regardless of whatever the tax rates are.
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