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Macroeconomic Issue

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    Macroeconomic Issue

    PRO TAX CUT

    Tax reduction is one of the pressing issues nowadays and also the hottest topic of many conversations in many streets around the nation. Tax eats up the majority of every individual’s salary and is said to be a major burden to those people covered by the tax scheme of the national government. It is something that it really worth the effort to discuss about and hear the sentiments of sides, the government and the society particularly the tax payers, regarding the possible effects of cutting taxes in the nation.

                 Just as mentioned earlier, tax provides too much burden to many American households, even my parents just can’t hold anymore their grudges to tell the government to provide considerations to average income earners like most people in the country is categorized. It is just like, the government always turns into less powered commoners to have more funds for their programs and projects which is not only everyone can enjoy or avail. As of now, a debate on the congress regarding the legislation of tax cut which will benefit most of the American households, even my parents, if ever passed. President Bush is trying to replace the current tax rate from 15, 28, 31, 36, and 39.6% to a relatively more simplified structure of 10, 15, 25, and 33% which give more rooms for households to enjoy lower tax rates (“The President’s Agenda for Tax Relief” 1). In addition to this, President George Bush is trying to eliminate death tax as one of the component of his move to lower down the tax rates of every American household. The tax relief agenda of the office of the president is a manifestation of George Bush intention on easing the tax burden of American households and divert its attention from households and foreign and domestic investors.

                Considering that most of commodities in various supermarkets and stores are relatively expensive compared before, tax cut would give enough room for our parents to have extra money for grocery and buy more the commodities that we usually buy in the market. In other words, tax cut poses benefit to everyone of us, particularly the consumers like our parents, through providing enough room for our parents to be able top buy more of a given product. Furthermore, tax cuts will allow households to avail products and services which they can’t avail before when the tax rate was still relatively higher as set by the federal government. Also, our parents can now save more in banks as the tax reduction that they will receive can be allotted for savings-purposes.

                At this point, we were able to see how beneficial to many American households, consumers, and savers the tax reduction agenda that George Bush is trying to put into legislation.  But this welfare improvement does not account the impact of such reduction on tax rates to the welfare of the federal government.

    ANTI TAX CUT

                Most critics of tax rate reduction are federal officials of various states who depend much on tax collection in order to finance their projects and programs for their own constituents. This is quite expected considering that the government would really start receiving lower tax revenues by the time the tax reduction agenda of President George Bush is put into legislation. This cutting of tax might later on result to higher budget deficit as the local government tries to finance their increasing projects and programs for their locals. It would be hard on the part of the federal government to find other ways to compensate for the revenue that they might be able to lose in case the tax reduction agenda of President George Bush is put into legislation.

                Moreover, there is also a possibility that the federal government will reduce the number of its projects and programs for the public in order to prevent the ballooning of its budget deficit and allocate efficiently its limited financial resource once this tax cutting policy is put into mandate. Through this action, the government will be able to prevent the worsening of budget deficit in the next coming years but has a price of forcing the government to cut its programs and projects to its constituents. At the end of the day, expenditures of the federal government will more likely to decrease as government officials are bound with limited funds to finance their projects and programs.

                In this regard, it is therefore clear how extent is the negative effects of cutting taxes on the part of the federal government. The question now would be, is the tax cut beneficial to the society after accounting all of the positive and negative effects of tax reduction in the society as a whole?

    Societal Welfare

                After considering all of the arguments of both sides, it was found out that tax reduction is beneficial to the society as a whole. Assuming that the said plan of President Bush is put into legislation, given that the government still has some other main income generation activities, the tax cut agenda will provide fewer burdens on the part of the government and will pose greater benefit of consumers in the market. It is the role of the government to provide greater welfare condition to its constituents, and so, by cutting the existing tax rate will promote welfare improvement to our fellow citizens/consumers. In this regard, I support the cutting of tax rates in the country to promote social welfare improvement.

    Works Cited

    “The President’s Agenda for Tax Relief.” 2008. The White House. 27 July 2008 <http://www.whitehouse.gov/news/reports/taxplan.html>.

    Macroeconomic Issue. (2016, Dec 28). Retrieved from https://graduateway.com/macroeconomic-issue/

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