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ragingloli's avatar

What are the pros and cons of tying tax cuts to specific or general purposes and conditions?

Asked by ragingloli (52207points) August 25th, 2009

Inspired by the huge success of “cash for clunkers” and earlier similar programmes in other nations.

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2 Answers

dpworkin's avatar

Taxes have always been used to redistribute wealth from one group or class to another: from overpolluters to underpolluters, from (in the case of Reagan’s tax structure) from the poor, middle and working classes to the wealthy, in the case of Obama’s proposed taxation for health care from the very wealthy to the rest of society.

But taxes are almost never just a neutral way of garnering revenue – they always have an overweening political purpose, and have since before the Middle Ages.

wundayatta's avatar

Pro: encourage behavior that society (or politicians or lobbyists) deem to be of value to society.

Con: reduces revenue. Makes it harder to pay for needed services. Increases sense that government doesn’t know what it’s doing.

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