Donald Trump’s Tax-Cut will lead to job creation or economic growth?
Will the ‘Rocket Fuel’ pitted as Donald Trump’s Tax Cut lead to job creation or economic growth?
The buzz in New York is the much-hyped tax-reform proposed by Donald Trump will benefit the already wealthy more than any other group. A majority of Americans, however, believe the tax cut sold as ‘rocket-fuel’ will be any good for job creation.
So what does the tax has to do with the creation of more jobs? The ones living in ivory towers have their needs met and most of their wants. So it doesn’t really matter even if you decrease their taxes to Nil, they are most unlikely to hire for more. Therefore, effectively the money will be unspent. Now if we were to tax these corporations, you could use the money on various projects the country needs. More demand would result in more products being sold thus resulting in more profits leading to a lookout for more employees. According to 1,290 surveys done, people who own small businesses do think they will be the biggest winners.
AS Warren Buffet once famously said, “I have yet to see” anyone “shy away from a sensible investment because of the tax rate on the potential gain”, so what this implies is a one-time increase in stock prices but with no impact on employment or operations. In other words a serious growth projection, competitiveness and job creation, one should look beyond tax-cuts. Public sector investments coupled with business infrastructure up-gradation are the backbone of any strong economy.
So here is the list of proposed winners and losers from the Republican tax bill:
- Donald Trump
- Individual Tax Payers-Short Term
- Most-Middle Class Tax-Payers
- Individual Tax Payers-Long-Term
- Fiscal Conservatism
- The Blue States
- Tax Accountants
- Obamacare Marketplaces
It’s still an open question as to the real impact of the bill is concerned. Either way, it’s likely that most people are set to loose with the proposed tax cut.
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Sources: VOX, Survey Monkey, CNBC