The rationale of awarding tax cuts by the government is to give an incentive to people to work harder for their money. That is because, the more work and the more money they make, the government will take less than before. Thus, tax cuts can also work as a stimulus in increasing productivity in particular and the economy in general.
Another argument for tax cuts is that people know best how to spend or invest their own money. Instead of government spending the people's money on another government building or another road, people would rather spend that money on something else, like investing in equities, buying real estate or just buying something for themselves.
This spending or investing will encourage the right industries to prosper. Spending will encourage employment and fan the growth of the economy.
As long as there is a sound tax system in place, I've never seen any negative side to giving tax cuts, until now.
I saw a Global Public Service (GPS) program in CNN reporting that the biggest mistake of George W. Bush during his term was not invading Iraq, but granting tax cuts to high income(?) Americans.
After Bill Clinton's term, the US forecasted in 2001 a budget surplus of around $5.6 Trilion spread out in the next 10 years. In 2002, a year after Bush was elected, 2/3 of that surplus evaporated. Now, the US is expecting instead a budget deficit in the trillion of dollars.
After the tax cuts, the US, according to host Fareed Zakaria, could have saved for the future. These savings could have been invested or put into businesses. Instead, Americans, particularly the high income earners, spent most of the money on high-end luxury goods.
Another argument for tax cuts is that people know best how to spend or invest their own money. Instead of government spending the people's money on another government building or another road, people would rather spend that money on something else, like investing in equities, buying real estate or just buying something for themselves.
This spending or investing will encourage the right industries to prosper. Spending will encourage employment and fan the growth of the economy.
As long as there is a sound tax system in place, I've never seen any negative side to giving tax cuts, until now.
I saw a Global Public Service (GPS) program in CNN reporting that the biggest mistake of George W. Bush during his term was not invading Iraq, but granting tax cuts to high income(?) Americans.
After Bill Clinton's term, the US forecasted in 2001 a budget surplus of around $5.6 Trilion spread out in the next 10 years. In 2002, a year after Bush was elected, 2/3 of that surplus evaporated. Now, the US is expecting instead a budget deficit in the trillion of dollars.
After the tax cuts, the US, according to host Fareed Zakaria, could have saved for the future. These savings could have been invested or put into businesses. Instead, Americans, particularly the high income earners, spent most of the money on high-end luxury goods.
do you think, its applicable to the Philippines?
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