Middle Class Tax Cut - What it Means for Us
So I've been using my skills in Economics and really thinking about what the Middle Class tax cut means for all of us. (Actually I was watching TV and I had an ampifany). Remember this is just theory and sometimes theory doesn't work out as well in reality.
A tax cut would mean the following:
More Money in the 401K Plans:
With more money, people in the middle class will put more money in their 401K plans. Since 401Ks buy stock in companies we will see a more stable and better stock market. See a lot of investors will buy stocks in a company, hold it and then sell, use the money to buy more stocks. Since the money will be used to buy and hold stock, we will see better gains in the stockmarket and in retirement accounts.
This will allow better retirements for a lot of people.
Larger Bank Accounts:
If people have more money, they will put their money in their bank account. This will allow a lot of the savings and loan banks to have more disposable revenue to make loans. This should open up the credit market and help to unfreeze credit. It will also mean that some banks that are losing money will make more money.
This will make getting loans a little easier.
Better Service Industry:
People will buy more consumer goods with desposable income. With more consumer goods being bought, small buisnesses that work in retail and service, like resturants, will enjoy better revenue.
Better Tourism Industry:
There will be a large boost to the tourism industry because people can afford to take trips. This should improve small buisnesses that work in the tourism industry.
Less Inflation (less debt):
People who need to use credit to make ends meet won't have to use as much if they have disposable income. This will cut the inflation rate and make our money worth more then it is.
If anyone has anymore to add or I have another ampifany, I'll post it here, and feel free to add on to my list of things it will help.