Why raise taxes in a bad economy?

The idea of cutting taxes to improve the economy works because of the big multiplying effect. The same money that is freed up is used over and over again. The consumer spends it at a retailer, who then uses it to buy from the wholesaler, who again uses it to buy from a manufacturer, who buys raw materials and pays workers, etc. But there's a delay - it takes time for the stimulus to trickle down through the economy. So this route involves short-term scrimping by the government to produce long-term benefits for everybody as the tax base improves. Raising taxes in a bad economy also produces the multiplying effect - in reverse. This route bails out the government for the short term at the cost of long-term poverty for everybody - including the government as the tax base shrinks further. Then what? Raise taxes again?

Gib Van Dine

West Chicago