Beware of Deep Tax Cuts, says Gleckman
While cutting tax rates is a good idea, it can be very hard to pull off to keep the economy moving forward, according to Howard Gleckman.
Now, the Tax Policy Center is showing that not only would tax cuts dig a deep fiscal hole for the the U.S. economy, but it would also affect households on different levels. In 2015, it would cut taxes for those households in the lowest 20 percent of income (who will make roughly $25,000 or less) by an average of $3.
Middle income households would get an extra $700, boosting their after-tax income by about 1.3 percent. As for the top 20 percent of households, they would get nearly four fifths of the tax cuts, benefiting the most from the move.
While Congress could make up the difference in the 3.8 trillion deficit by cutting tax preferences, itís highly unlikely that these types of tax cuts will do the country any good, because giving the richer people a tax break only solves half the problem. The other half is how the gap between social classes, poor, middle and rich, can close.
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