Kenneth,
If a National leader tries to raise taxes, the best time, would be during an economic recovery. The best time to lower taxes on a National basis, would be during a recession or a deflationary period.
When Clinton raised taxes in 1993, he inherited an economy in recovery. If one were to increase taxes, I guess that would be the best to do so, would be after an economic recovery was a couple years old.
In contrast, Bush 43, became President while the Country was either entering or already in recession. If One were to lower taxes, the best time to do so, would be during an economic downturn - which is what he did. Certainly, increasing federal taxes during a recession is stupid. Bush argued that the tax break would stimulate consumer spending - critics argued that taxes would not (but be used to pay down already high consumer debt). What happened, is that consumer spending was higher than expected. Further, as the tax refund began making it way to people, the GDP went from negative growth to positive. |
