Comment 81227

By MVH (anonymous) | Posted September 25, 2012 at 09:34:44

I have always found discussion on income tax breaks as economic drivers confusing. The reason being the timing of the tax. Income taxes (or any tax for that matter) is supposed to be the governments share of the revenue generated by economic activity. So why would changes in the amount of tax payable be an incentive to spend more? Taxes are simply the governments share. Whether you have $1, or $100,000 left over, the amount you are allowed to keep does not translate into an incentive to spend.

What there should be more of are creative tax breaks based upon investment of earnings. For example a large income earner could receive tax breaks for investments in designated community projects designed to help low income earners. That way the tax break is designed to help those less fortunate.

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