Why are tax cuts for the wealthiest corporations not a good investment?

Many politicians argue that increasing taxes is bad for a struggling economy. It is important to keep in mind that to persuade someone of something false, something true is usually mixed in to elicit support. It is true that if you raised taxes on the working poor and middle class it would depress their spending and therefore limit the ability of the "fiscal" multiplier effect. This effect causes an increase in consumption that drives economic growth. In other words, when poor and middle class people get money (such as a reduction of taxes) they almost always spend it immediately, thus generating economic growth.


The same phenomenon is not true for wealthy individuals and corporations. The very wealthy individuals and corporations already have the incentives they need to spend money if they choose to. Giving them tax breaks does not necessarily mean they will spend it. Politicians often say that a tax increase on businesses would be detrimental to our economy and prevent job-creation. This is only true if the money paid to the government would otherwise be invested in job-creation. The truth is that the small and medium businesses act much like working and middle class people-they spend money almost as soon as they get it. This is not true, however, for very large businesses. They already have monies available to them that they choose not to invest so a little more money rarely means they will increase their rate of investment. But let's assume that there are a few very wealthy corporations that will invest money in jobs that would otherwise go to taxes. Only a very small amount of those wealthy corporations that decide to invest will invest that money here in the United States. So the idea that relieving the wealthiest Americans of their tax burdens will create jobs here in America is quite a stretch to say the least. The only really effective tax cuts that are sure things as far as stimulating the economy are those to the middle class and working class as well as the small to medium businesses. Tax cuts, as stated in below text, are not even the best way to stimulate the economy as government spending is more of a stimulus. This government spending is obviously getting harder and harder to do as we go deeper into debt. Well, if this is the case then we better raise money the only way a government can-tax those who can afford it.

It is my opinion that the powers that be in this country are successfully dividing the middle and working class by pitting us against each other in order to cleverly hide their own misdeeds and responsibilities.

Text from Wikipedia link:

"In congressional testimony given in July 2008, Mark Zandi, chief economist for Moody's Economy.com, provided estimates of the one year multiplier effect for several fiscal policy options. The multipliers showed that increased government spending would have more of a multiplier effect than tax cuts. The most effective policy, a temporary increase in food stamps, had an estimated multiplier of 1.73. Making the Bush tax cuts permanent, had the second lowest multiplier, 0.23. A payroll tax holiday had the largest multiplier for tax cuts, 1.29. Refundable lump-sum tax rebates, the policy used in the Economic Stimulus Act of 2008, had the second largest multiplier for a tax cut, 1.26.^[3]"