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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (8948)	6/4/2009 7:05:59 AM
From: Road Walker	Read Replies (1) \| Respond to of 86356

Toyota Prius tops monthly auto sales in Japan (AP:TOKYO) Toyota's Prius was ranked the No. 1 selling vehicle in Japan for May, clinching the top spot in the domestic market for the first time. The revamped Prius debuted last month. Toyota Motor Corp. sold 10,915 of the hybrid cars in May in Japan, more than a five-fold increase from the previous month, according to data released Thursday by the Japan Automobile Dealers Association. Honda's new hybrid, the Insight, slipped to third place with 8,183 units sold after nabbing the top spot in April. That means for the second straight month, a hybrid car _ powered by gasoline and electricity _ topped the sales rankings in Japan amid the growing popularity of green cars. A government tax break for environment-friendly cars in Japan also has helped. news.ino.com

To: RetiredNow who wrote (8948)	6/4/2009 4:20:08 PM
From: TimF	Respond to of 86356

A tax cut isn't directly creating new wealth even if there is no deficit. It may indirectly create new wealth, but it isn't itself the creation of wealth. Its leaving the wealth in the hands of those who earn it. The bigger concern however is government spending, since increases in government spending imply either current or future taxes that are higher than they otherwise would have been, or monetizing the debt thus driving inflation. I can't think of a single scenario where borrowing money to give tax cuts to citizens makes sense. First of all your not borrowing the money to give tax cuts. The borrowing is to cover the spending, and tax cuts are not giving to anyone they are just reducing the amount that the government takes. And tax cuts even with borrowing (up to a point) can make sense because its not just a demand side stimulus, but also, as I said before an "incentive/supply side effect". Also if tax rates start out really high then tax revenue can actually increase with tax cuts. From more normal levels, at least with ordinary income taxes, you won't typically get such an effect but the reduction in income for the government is less than the reduction in the tax rate. Cut taxes by x% and you will normally reduce revenue by less than x%, sometimes by much less. The problem now is that we are well passed the "to a point" I referred to in terms of borrowing. Its not like the debt is increasing at a lower rate than either the current (negative) or the long run rate of economic growth. Or that the debt and deficit are just high because of a short term blip and will soon drop.