Will Barack Obama's plan to offer $300 billion in tax cuts be good for the market?
In an attempt to spark some life into an otherwise limp economy, President-elect Barack Obama has proposed up to $310 billion in tax cuts for businesses and the middle class as part of his massive economic stimulus package.
The tax relief is aimed at attracting support from fiscal conservatives in Congress, who prefer cutting taxes to increasing federal spending.
The U.S. economy is in need of drastic measures. U.S. jobs data at the end of the week are expected to show half a million jobs were lost in December alone, pushing the unemployment rate to 7 percent.
“To make tax cuts meaningful they have to be tax rate reductions on people who make decisions,” says the father of supply-side economics, Arthur Laffer. “But I like the tax cuts more than the stimulus plan.”
Laffer is referring to plans to stimulate the economy with a massive spending package that would include a major expansion of government-assisted health care insurance and unemployment benefits.
These proposals would be included with other economic measures such as the much talked about plan to spend on roads, bridges and other public works projects.
What’s the bottom line? “It’s not a winner,” concludes Laffer. “It’s going to hurt the economy more than it’s going to help.”
Laffer has lots of initiatives he thinks would, in fact, stimulate the economy. Hear all his ideas. Watch the video now.