The Trouble with Tax Cuts
Well I’ve had several questions lately about a statement I made in my post CA Obstructionism and Political Games in which I was pretty dismissive of tax cuts in the stimulus bill. All the questions came via email of course (this is what the commenting system is for guys! You can comment anonymously if you want!). Anyway, while I’m planning on writing a much larger treatise on tax policy at some later date, I thought I’d address why I think tax cuts provide for relatively little stimulus. I’m going to try to keep it as non-technical and conversational as possible. And I should note before I begin that the principles I’ll present in this post are not universally agreed upon in the field of economics, but they are reflective of the economic philosophies that seem most reasonable to me given my educational experiences, and the views that are most widely held among economists today. So with that, lets just jump right in, this is the trouble with tax cuts as far as I can tell… Continue reading
