How do Bush Tax Cuts affect the Market?? Democratic increases?

[smartinvestor30]

I'm trying to get some different opinions on economic theory regarding what tax cuts do, this is not a political discussion thread:


If the Bush tax cuts are made permanent (not likely) that would mean that the wealthy people as well as big businesses will continue to invest or invest more thus driving the economy. Are they supply side cuts (budget deficit decreases) or Keynesian tax cuts (stimulating the demand side)? What will they look like 5 years out from today if they were made permanent, supply-side or demand-side cuts?

Would a Democratic president elected in 2008 cause much slower growth with the tax increases for the wealthy (which they say limits investment) and cuts for the middle class?

Would the cuts for the middle class cause more economic boom in China (since most middle class do not stimulate investment but rather spend at wal-mart or buy thing generally made in China)?

Does everyone here believe that tax cuts for the wealthy increase investment? Can Democrats stimulate the economy by ending the war (sorry Halliburton and all you HAL investors) and creating "green-collar jobs"?

[piggybank]

It depends on how the tax cuts are scaled. Flat tax or gradual tax? In Europe by norm rich people pay far more taxes than middle or poor class. So tax cuts affect poor/middle class more.

In any case tax cuts will indeed likely increase investments. Doesn't mean that it's nessecarily that smart, it depends in what the people invest in. Hopefully not even more Asian consumer goods or consumer goods producing firms. Personally at this point i would plan the economy more, instead of giving tax cuts so the American people can blow money away to outside junk i would use it to fund and accelerate local industrial expansion in new markets and promote energy dependancy. At this point the outflow of dollars should be decreased.

The end of war in iraq should be benificial, granted as long as Iraq stays a stable oil supplier at that. It's the costs going into the Iraq war that created the whole large budget deficit in the first place.

[freakscene]

Does everyone here believe that tax cuts for the wealthy increase investment? Can Democrats stimulate the economy by ending the war (sorry Halliburton and all you HAL investors) and creating "green-collar jobs"?

1) Yes. But they need not be for the "wealthy" only, whatever figure that is.
2) No. Because the inevitable tax raises will hinder expansion.

[smartinvestor30]

1) Yes. But they need not be for the "wealthy" only, whatever figure that is.
2) No. Because the inevitable tax raises will hinder expansion.

Plus Billions/trillions coming out of the Defense Sector! Democrats are trouble for investors, but great in the long run for the USA and fixing our dependence of oil.