₦airaland Forum

If you define economy as the spending power of the people, then tax cuts will help boost the economy. If you factor in the government debt, then they may not.

At the end of the day, these are two separate issues.

1. The government debt SHOULD be reduced by reducing government spending, not by taxing the population.

2. By reducing taxes on individuals, they keep more of their money, which for most people means they will spend more money, which will boost the economy. By reducing taxes on small businesses, they can reduce prices OR expand their business, both of which boost the economy. Small businesses are the backbone of the US economy, and their health is a great indicator of economic growth. For example, if you reduce taxes on a chimney cleaning business, if they reduce their prices, more people can afford to use their services more often. That means they spend more money on fuel going to customer locations, they may hire more people, they will probably spend more money replacing equipment more often, etc. In the end, the small business spends more money, creating more jobs in their own business or the businesses they spend money with.

When taxes are low, the economy blooms. High taxes stifle economic growth, and eventually lead to outsourcing, which helps someone else's economy, not ours.