Congress recently passed a tax cut package. Depending on who one might ask, the tax cut will turbocharge the economy or it will lead to massive deficits in the years to come. The article that is summarized in this brief report looks at a take and summary from the New York Times. The verdict, in short, is that “time will tell” as to whether or not the tax cut will achieve the desired result. The article first points to a few claims that President Trump made during his recent State of the Union address. One of those claims, of course, related to the tax cut package that was passed and how it was the “biggest” in the history of the country. The article’s authors, James Stewart, admits straight away that the current form and function of the economy is very strong. However, Stewart is also quick to point out that only a month has passed since the tax cut package passed and more than thirty years have passed since the Reagan tax cuts passed. When it comes to the latter, there are still people that debate whether those tax cuts in the 1980’s had the effect that is often...
A professor from UC Berkeley, he notes that making a single change in a laboratory experiment and testing the results is one thing. However, this is impossible to do in a national economy, or even a city or state one. Indeed, he refers to the fact that even if the economy responds post-tax cut the way that the economy seemingly did after the Reagan tax cut package, this does not mean that the tax cut packages are the reason. At the very least, it might not be the only reason and/or it may actually be a drag on the economy as compared to what else is going on. Put another way, there are so many things going on in a national economy even if no tax changes are being made to the tax code or the budget. As such, one can make reasonable guesses as to what caused a national trend to occur. However, there are always outliers and exceptions and proving causality is a lot harder to…
Effect of External and Internal Environment Introduction Organizations have both an internal and external environment. To begin with, the forces or circumstances within the borderline of the organization are the components of the internal environment. Notably, the internal environment comprises for the most part of the owners, employees, board of directors, stakeholders, and the corporate culture. On the other hand, factors that are extrinsic to the organization are the components of the
Fiscal Policy A lot of debates exists out there in the economic ether regarding the best economic structure for an economy. Even so, there is a broad amount of consensus that exists regarding what should be done during expansionary economic shifts and what is less than wise. With that in mind, the author of this report shall address a number of questions related to that overall topic including what should be
With the Fed shifting from quantitative easing (QE) to quantitative tightening (QT) in recent years, and the end of unconventional monetary policy, interest rates are set to continue to rise as the central bank reduces its balance sheet. With bond yields already going up and volatility at all-time lows, questions remain about how the market will react to this normalization process. One thing is for certain, however: the recent rise
As Geisel (2004) notes: Income-tax deductions are worth the most to high-bracket taxpayers, who need little incentive to save, whereas the lowest-paid third of workers, whose tax burden consists primarily of the Social Security payroll tax (and who have no income-tax liability), receive no subsidy at all. Federal tax subsidies for retirement saving exceed $120 billion a year, but two thirds of that money benefits the most affluent 20% of
Forefathers founded this great nation, they did so with the intention of creating a nation full of liberty where the pursuit of happiness was available to all, not just a selected few. Since the formation of our government and country; entrepreneurs and business people have amassed large fortunes and have accrued immense riches by using the hard manual labor of the lower classes who work hard, sometimes for the
American Recovery and Reinvestment Act In the wake of the 2008 market crash and the ensuing recession, the U.S. government developed a plan to shore up the economy in the face of dwindling economic activity. That plan combined federal stimulus with tax breaks to help fill the gap created by cuts in consumer spending. The steps taken by the government were meant to create a short-term solution -- but the controversy
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