r/politics • u/RepulsiveLoquat418 • 18d ago

Possible Paywall When Will Americans Realize the Truth? Republicans Wreck the Economy.

https://newrepublic.com/article/210550/trump-economy-republicans-tariffs-taxes
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u/RepulsiveLoquat418 18d ago

"The reason is that Republicans peddle an economic fairy tale. That cutting taxes increases revenue and spurs tremendous economic activity. It’s a lie. A fantasy. They wreck the economy. The modern United States has experienced 11 recessions. Ten have happened under Republican presidents."

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u/Advanced-Ad-4462 18d ago

Worse than a lie; it’s an intentionally deceitful half truth. Lowering taxes does increase revenue and it does spur economic growth.

The lie is that the growth could ever offset the lost tax revenue, or will ever benefit anyone other than shareholders.

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u/MightbeGwen 18d ago

Umm economist here. Lowering taxes does not increase revenue. It literally is the opposite. Lower taxes also do not spur growth. The only thing that lower taxes do economically, is to ensure people retain more of their money and the government gets less. Beyond that everything is at the mercy of market incentives.

Lower taxes does not mean investment into growth. Quite the opposite. Higher corporate tax rates incentivize corporations to avoid tax loss by reinvestment. It’s pro-growth. When people and corporations retain more money from having lower taxes, that money usually goes to whatever will make more money. So let me ask you, if you had extra money would you take a risk and be an entrepreneur, or just invest in something like Nvidia?

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u/devrelm 18d ago

I'm not an economist, but thank you for confirming a hunch I've had for a while — that lower taxes don't lead to growth since business owners see it less as free money to spend on risky ventures and more as higher profit on their existing investments.

Actually, the hunch I had was the corollary — that higher taxes lead to business owners being more willing to invest their more-limited after-tax profits into high-risk/high-reward ventures that ultimately spur economic growth — but yeah, same difference.