Tax Cuts essays

Tax Cuts essays Dominic Shafer James Bang A09 The article I chose to comment on, The Double Benefit of Tax Cuts is from The Wall Street Journal. It was published on Tuesday October 7, 2003 and was written by Gary Becker, Edward Lazear, and Kevin Murphy. My article covers the current issue of presidential candidates and their plans to make tax cuts. In a debate on economics in September 2003, every Democratic candidate talked about rolling back President Bushs tax cuts. The candidates tried to show that in a time of economic recovery it would be the perfect time to introduce tax reductions, which would help stimulate economic activity over the next year or more. The idea of whether or not a tax cut would help out over a long period of time was not an important issue in this discussion. There were two main ideas behind cutting takes that the candidates talked about. The first reason they talked about is that a tax cut would make sense is because government spending responds to tax revenues, so that lower revenues imply lower government spending. Just as in a business, the spending by the government is limited by its revenue. It was also pointed out that the government budget equation plays a factor on the revenue. Normally, government spending has to do with societys needs and takes taxes to balance the government budget equation, but there is some evidence that shows spending often adjusts to the tax revenue. In the past, tax cuts have shown the dependence of spending on tax revenue. In the 1980s President Reagan proposed a tax cut that helped promote long-term growth. President Bush hoped his tax cuts would stimulate the economy and help future growth. In the late 1980s and early 90s there was a decline in federal spending, which was linked to the need to adjust spending to growin...