Quote:
Originally Posted by wdfifteen
Logically, it depends on the state of the economy. If an economy is in a crisis of capacity (where demand outpaces production), cutting taxes to allow business to expand and hire more people would logically increase revenue.
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Or ship jobs overseas.
Quote:
Originally Posted by wdfifteen
When an economy is in a crisis of demand (where debt and unemployment keeps consumers from buying - which is the state the US and much of the world is now) cutting taxes on business just gives them more money to stash in the bank. They aren't going to use it to increase production capacity when consumers aren't buying/can't buy the products they make. That's the current situation - American companies have a record nearly $2 trillion sitting on the sidelines now. What is going to get this economy moving is cash in the hands of consumers, not cuts in the taxes of producers.
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More cash in the hands of consumers could just go back into the Stock Market with lower capital gains taxes. The Laffer Curve Theory was developed in the 70s. What's the delta of consumer involvement in the Stock Market in the 70s vs. today?
Will volume make up for lower capital gains?