(01-05-2021, 07:01 PM)TJBender Wrote:

(01-05-2021, 06:51 PM)jagibelieve Wrote: Real stimulus would be cutting taxes.

And where do you make that money up?

This is not an endorsement of income tax on my part, but if you're going to cut taxes again and this country's already stuck in deficit purgatory, rapidly approaching burning in inflationary hell, where does that get made up? The country still has to run.

Cutting taxes doesn't significantly drive short term market stimulus.  Considering several of the most common;
 
Income   Federal and possibly State, depending where you live/work, but those who most need help to survive are already paying minimal amounts.

Property   Municipal and in most cases, there's no room for reduction without matching budget cuts.  Some municipalities have opted for a very forgiving stance on requests for abatement of late payment penalties and interest during the pandemic.  That's helpful to struggling property owners, but doesn't provide any extra disposable income.

Sales    State and occasionally municipal, but again, those who need help aren't buying that much.  It would help stimulate big dollar purchases, cars, boats, RV's, etc. but an incentive that allows the tax-free purchase of a new Mercedes would generate a political firestorm.

Estate   Federal exemption is currently 11.4 million (see Mercedes/firestorm comment above) and about 25% of states also have their own.  People are dying for this one.

Lodging/Meals   State and occasionally municipal.  6-10% in most places, higher in a few others.  Again budget issues, but far better to sacrifice the tax and help business that have been so hard hit.  I don't think it will provide a significant stimulus, but every little bit helps and it makes good press.

Capital gains  The controversial one!  Fed & state both getting a nice chunk of the pie!  Reductions in long term rates would stimulate real estate development, but it takes years for the benefit to be fully realized.  Short term reduction could have a big impact, but it will be publicly perceived as a benefit to the Wall Street crowd so.....

Fuel   Federal and state.  Usage driven, not much help to most consumers at the transportation level.  The trucking industry has more work than it can handle so it's not in danger.  A reduction in heating cost would help much of the country, especially those in the north.

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