This assignment will discuss the government’s need to raise and lower taxes and the outcome it has on the GDP and net personal income and other key factors that play part in the government’s decision on whether to increase taxes on everyone as a way to balance our economy. When the government lowers taxes people begin to feel less uncomfortable about spending their hard-earned money and begin to make purchases. When the taxes are lowered the dollar will see an increase in purchasing power and essentially buy more products and services than before the tax cut. Lower taxes along with controlled government spending have an immediate positive effect on the economy that stimulates the economy to move forward. People begin to spend more money and are not as worried that they have to save every penny that they make; thus the economy will pick up and essentially create more jobs as new businesses arise.
Therefore capital raised from one person or a group of professional investors remains a crucial source of funding for these type of enterprises. In the type of economic world which is present today the opportunity for good returns on a person's money must be in abundance to allure investments in such ventures. Capital gains taxes significantly diminish these returns, therefore reducing the incentives to invest. Eliminating the capital gains tax will spark entrepreneurship and new investments in the economy, which in turn will elevate economic growth and increase the number of jobs. In order to stimulate economic growth in the United States, taxes on capital gains should be eliminated.
Rather than only buying merchandise from the US, we should refocus our workforce towards industries in which we have an advantage and trade for products created abroad. This is the only way that our global economy can flourish in the long run. Why does buying American sound so attractive? The most common and convincing argument is that it will create more jobs for Americans. An estimated 8.4 million jobs were lost between the beginning of 2008 and the end of 2009.
If a flat tax policy were instituted, then it would simplify the complicated tax system, create fairness within the economy, and promote a desire to thrive financially. The flat tax would simplify the tax system because instead of filling out a variety of complicated forms, a person would only need to tell the IRS how much money they make, then give the percent of that amount. This would dissolve all of the loopholes that exist within the current system. It would cut back on the opportunities for unethical people to cheat. If the flat tax system were taken, taxpayers would save 94% in compliance costs (Website).
Economic Policy The new economic policy of the united states should include cutting taxes, reducing governmental waste, and balance the budget by having a smaller more efficient federal government. It should include equal opportunity for financial security but not through a government sponsored redistribution of wealth program. Cutting taxes across the board including income tax rates, capital gains and estate taxes among others should provide a growth spurt for the economy. Allowing people and businesses to keep more of their hard earned money would enable them to spend more money. People would be able to buy more cars, refrigerators, homes etc.
This is a relief of not having to struggle like we all have to in today’s economy. In correlation to giving more funds and the feeling of being relieved, it would increase the federal revenue. As it stands, people do not have much to spend, so people hoard all the money they can for times when it really is needed. If the taxes are lowered, people will feel safer and would be more willing to spend more, the... ... middle of paper ... ...axes are filed. Also, there would only be a little bit to be put back into the peoples pay checks by lowering the taxes.
Deregulation has been believed to raise levels of competitiveness and a sustainable free market leading to increase in productivity (Dougherty & Yahmed, 2017). Deregulation also leads to improvement of social welfare. Companies that have invested overseas have been subjected to deregulation which involves reducing government interference on companies that relocate to the United States to curb the unemployment rate in the country which reducing their cost of operations. Deregulation has also initiated supply for innovation and entrepreneurship leading to the improved quality of goods and services. It has also facilitated supply by encouraging market entry making producers have less control over their competitors.
The raising of minimum wage achieves a domino effect, it allows for new job growth since people have more wants, it also helps to reduce crime, people that are able to pay their bills with what they have and don’t need to go and steal just to feed their families. It is commonsensical that the minimum wage be a living wage not a subpar amount that causes people to work double the amount just to make ends meet. The Democratic Party is the party that fights for workers, one of the strongest supporters for the Democratic Party is labor unions, and labor unions are organizations of skilled workers that fight for air pay for their work. Unions get their strength by bargaining as a whole instead of individuals, therefore having more barging power. The Democratic Party fights for everyone to have a not only a minimum wage but a living wage.
“Interestingly, raising taxes to pay for current spending has proved more effective at restraining spending than allowing the government to finance its outlays with deficits”(Gale 2). We see proof of this during President Clintons term where taxes were raised and spending fell. By just making tax cuts for society will not decrease s... ... middle of paper ... ... to eat away at this debt problem, solve the issue at hand and not put them off because they are only growing each year. Revenues must be increased and that is done but cutting government spending, raising taxes and investing in things that will sustain us as a nation in our future. Works Cited Gale, William G. "A Perspective on the Budget Deficit and Revenues."
We would have less crime, lower taxes, a higher standard of living, a smaller gap between classes, less unemployment and homelessness, and overall much more money cycling through our economy. The best thing to do to remove us from this recession is to spend money. If we spend money then companies will spend money to make more products. The more we buy the products, the cheaper the products become. It is a well-understood cycle and I believe it is essential for the news stations to stop encouraging citizens to save every penny.