Recent polls that were conducted after the Bush tax cut proposal suggested that only 45% of the public backs the bill. This means that the majority are either against it, indifferent or confused. I am against the tax cuts because it shows that most of the money returned from the cuts is going to those who are already very rich. By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 percent of the total tax cuts will go to the richest one percent—whose average 2010 income will be $1.5 million. Their tax-cut windfall in that year alone will average $85,000 each. Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go just 1.4 million taxpayers.
The tax cuts affect the incentives, to work, save and invest. People are unlikely to supply more labor and capital when existing labor and capital are already underutilized. So, tax cuts may help end a recession through their effects on aggregate demand, but not through their effects on aggregate supply.
In the long term it affects the incentive structure for working, saving, investing, and risk taking. Individuals are motivated to work, for example, not by their gross salary, but by their after-tax salary. If taxes are reduced in a way that raises their after-tax income, this may provide an incentive to work more or, in the words of the economist, to substitute work for leisure. The same is true for saving. If the after-tax reward is increa
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