Bush Tax Cuts: How They Will Affect The Wealthy & Middle Class

By Richard West on July 30, 2010, 11:21 am

The Bush cut tuts are set to expire this year. Despite what either party says they did not cause or help the current economic crisis. The lack of credit and a large amount of fear on the part of businesses about what the Obama administration will do and has done is keeping the economy in a state of stagnation. Letting the tax cuts expire could cause the economy to move more slowly than it has been.

Reducing The Amount Of Money In The Economy

JFK and Ronald Reagan reduced taxes during a deep recession to put more money into the pockets of the people most likely to spend money. The method helped quicken the end of the deep recessions that occurred at the beginning of their presidencies. Because the current economic circumstances are caused by a credit crunch rather than a reluctance on the part of small businesses to spend money. Even if a business wants to expend money, the larger banks may not want to release the capital that will allow businesses to hire more people and expand.

 

Could Not Continuing The Tax Cuts Have A Negative Effect

While continuing the tax cuts may not help improve the current economic conditions, allowing them to lapse could cause prolong the recession and make it worse. The word recession may no longer apply to the current conditions, despite the President’s attempts to talk up the economy. The conditions do not have to get much worse before the term depression applies. Extending the tax cuts keeps the money in the hands of consumers and business owners who can help drive the wheels of recovery or at least spend what is currently getting spent to keep things from getting worse. Less money affects everyone. The wealthy can’t provide jobs and the middle class may not remain Middle Class.

Related posts:

1. Small Business Tax Cuts Will Devastate Economy Even Further
2. Expiring Bush Tax Cuts Will Kill Any Economic Recovery In 2011
3. Bush Tax Cuts: Middle Class Cuts On Table For Consideration
4. Bush Tax Cuts Out – Payroll Tax Holiday…Maybe
5. Credit Should Not Be A Problem For Small Business; What’s The Problem