Actually some shocking studies that I'd never heard of, from CBO at that (i.e., truly independent), about how tax cuts do NOT help stimulate the economy. Then why did we give away 35% of the already-too-small-by-half stimulus bill to the Republicans in the form of tax cuts?
NYT:
But economic research suggests that tax cuts, though difficult for politicians to resist in election season, have limited ability to bolster the flagging economy because they are essentially a supply-side remedy for a problem caused by lack of demand.
The nonpartisan Congressional Budget Office this year analyzed the short-term effects of 11 policy options and found that extending the tax cuts would be the least effective way to spur the economy and reduce unemployment. The report added that tax cuts for high earners would have the smallest “bang for the buck,” because wealthy Americans were more likely to save their money than spend it.
