Major Case Against Tax Plan

One of the major cases against the tax plan is that it favors the top one percent of people as well as large businesses. According to the Tax Policy Center, the top one percent would save an average of $129,000 a year with the new tax rate. The plan cuts the individual tax rate for people earning over 500,000 dollars from 39.6% to 37%. That doesn’t seem like a large percentage of money. For example, a person is making one million dollars annually in the previous plan would pay 396,000 in taxes. The new plan would require 370,000 in taxes. The government is losing twenty-six thousand dollars from one person's taxes. That money could have been given to a school instead of back to the millionaire. It could give a school 104 Chromebooks (at $250).

Fiscal policy is a way for the government to stabilize the economy. There are two ways the government can stabilize the economy increasing or decreasing taxes or increasing or decreasing government spending. If the economy is expanding too much and causes inflation, decreasing government spending and/or increasing taxes should occur. Inflation causes a currency to lose it’s purchasing power (the dollar is weak) and that causes prices to increase. Decreasing government spending puts less money into the economy which slows business investment and consumer spending as does an increase in taxes and effectively slowing down the growth of the economy and lower prices. By increasing taxes or decreasing government spending can lead to a budget surplus. A budget surplus is helpful if something bad happens in the nation or the economy. If the economy is in a downturn (recession), decreasing taxes and/or increasing government spending. A recession has prices really low and people aren’t making enough money to buy things. Increasing government spending and/or decreasing taxes increases consumer spending and business investment. Government spending has a greater impact than taxes. Increasing or decreasing government spending causes a direct impact on consumers and businesses. This could include increasing pay for government workers, creating contracts for businesses, or hiring new government employees. If the government decreases taxes, people usually save some of that money and spend the rest leading to less of an increase in the economy. When the government decreases taxes and increases spending a deficit can occur. According to Merriam-Webster, a deficit is an excess of expenditures over revenue. The current US deficit is at $440 billion. The current spending bill that is passing through Congress will add 4.4 billion dollars to the deficit. The bill is to give hundreds of billions of dollars to defense spending