economics

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How would cutting taxes improve the job market if people who are unemployed already are not paying any major taxes? Wouldn't it only help those who are gainfully employed?

  • economics -

    Cutting taxes supposedly helps businesses by lessening the amount of money they pay the government. That would give them more money with which to hire more workers.

  • economics -

    Wouldn't it only help those who are gainfully employed?

  • economics -

    Businesses pay a lot of taxes. If they don't have to pay as much to the government, then these businesses theoretically will have more money to hire more workers.

    The assumption is that businesses want to expand, and so giving them more money will help them hire more people.

  • economics -

    but how would this cutting taxes improve the job market if people who are unemployed already are not paying any major taxes? I am not seeing how?

  • economics -

    Because not everybody is unemployeed. If the unemployment rate hits 10%, that would be a lot. And, even unemployed people still pay taxes; although the taxes may not be income taxes. So, as Ms Sue correctly points out, lowering taxes gives most people more money to spend, and by spending more, firms need to produce more, and will need more workers to do so.

  • economics -

    how would econmic help you in the future?

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