Tax Cuts

Tax cuts for the affluent are more than just ineffective at stimulating the economy. They are detrimental. If these tax cuts are not offset by spending cuts, they worsen inflation. The adage 'too many dollars chasing too few goods' applies here. Inflation reduces consumer buying power. This further decreases demand for goods and services. In other words, there will be less inflation-adjusted consumer income as a result of these high-end tax cuts. This, in turn, further reduces demand for labor. Which further decreases aggregate labor income. Which will result in still further decreases in consumer spending. More high-end tax cuts will further perpetuate this downward spiral of consumer spending. And our economy will follow in the same downward spiral.

Tax cuts for those making over $100,000 per year made up 69% of the total tax cuts for 2004. Those making over $1,000,000/year received 15% of the total tax cut. Nearly all of this 15% will go towards investment. The bulk of the 69% will also go towards investment. Again , the inflationary effect of these unfunded tax cuts will reduce consumer buying power for a majority of consumers. The following site shows a breakdown of Bush's reverse Robin Hood tax policies.
http://www.faireconomy.org/press/2005/ResponsibleTaxPledgepr.htm

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