Quote:
Originally Posted by beej
Across the board corporate tax reductions, in theory, encourage entrepeneurial activity. The problem with that is that when Reagan pressed for and got it through Congress in the 1980's big business did not engage in such activity. They engaged in business acquisitions with the cash gained.
Moreover, and I'm not trying to get into a point/counterpoint debate either, as was demonstrated in the 1980's a massive tax reduction balloons the deficit. Yeah, the 80's were a boom but 1) it was done on a credit card and 2) much of it was as a consequence of a massive defense build up.
My 2 cents, adjusted for stimulus.
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No desire here to debate the 80’s, as that will only lead to a pointless, polarizing discussion. I'm trying to scrupulously avoid that in this thread. I will say that while consolidation / buyout activities did occur in the 1980’s, such activity continued into the 1990’s and beyond. Also, unemployment decreased from 1983 onward across all industries, not just defense related industries. So, while some increase in economic activity can be tied to defense, such activity only accounted for a portion of the increase in GDP during that time.
More to the point, the Michigan example I cited was trotted out under a Democrat governor, and was a reduction in business taxes.