Only in economics 101 would the bank need deposits for loans. In the real world there is no upper limit on money that wants to be invested, just a lack of feasible investment opportunities.
More fundamentally, governments want to stimulate the economy at all costs, so interest rates are near zero ("please take our money and create jobs") and plenty of attempts at subsidizing industries have been (and are still) made.
Since you can't quite force economic growth, startups etc., at least you can have money in circulation.
So, money in the bank, like money under the mattress, is bad for the economy. So, the tax cut may infact be bad from an economic perspective.
Taken to the logical limit that would imply that we shouldn't have taxes at all. You're assuming also that taxes are being cut across the board, but it is very unclear if the middle class will experience any positive change, while there is ample evidence that the President and most of his cabinet will make out quite well personally.
1) capital gains is lower than income
2) there are deductions for almost everything
3) tax-free retirement accounts
4) charitable deductions
The truth is that many of the above affect the middle class, too.
Plus:
1) Middle class typically doesn't have the ability to structure income as capital gains.
2) (See above.)
3) Given modest contribution caps in retirement accounts, not a major "loophole" for the wealthy.
4) Something we should encourage at all levels.
3. There are limits to how much can be put in them.
4. Sure, you get a tax deduction for donations to charity. But you NO LONGER HAVE THE MONEY. You gave it away. Giving money away is giving away the wealth.
That said, we don't live in one of those environments. We've probably had too much investment for the last 104 years or so...
This is a bad thing. That money won't disappear. It'll get spent or invested (either directly or indirectly by a bank if saved)
Tax cuts are bad. Stop saying they're good. The wealthy have money to affect political decisions because they can afford lobbyists, so it's the not-so-wealthy who have a marginalized impact.
Compare to someone who's poor - they spend most of their take-home pay on daily needs that spur the economy.
Cutting taxes for the rich only gives them more money - trickle-down theory has been proven to not work, and in fact the biggest net return for governments is to simply hand out cash (qualified as welfare/food stamps or unqualified like universal income) - that gets the government like 1.7x the amount handed out in tax receipts inbound as the cash passes through the economy.
Ah, the ol' "trickle down economics" trope that refuses to die. I've been waiting since the Reagan administration to see it actually work as advertised.
Tax cuts are good. Stop saying they’re bad.
If only saying it made it true. The current proposal doesn't look to benefit me, a household making well into six figures. Guess we'll have to work harder to make the >$400K needed to benefit from the latest "reform" proposal. That, or start funneling all of our income through an LLC. Meanwhile, at the bottom end, the taxes go up from 10% to 12%.
Tax cuts are good if you're incredibly rich (and not just mildly rich like me). For the vast majority of us, it won't benefit us at all.
They also get the most income and wealth.
"This isn’t a bad thing. That money won’t dissapear. It’ll get spent or invested (either directly or indirectly by a bank if saved)."
Maybe. But that also doesn't mean it'll be used for something good for society, rather than Uber for Dogs.
"Tax cuts are good."
Tax cuts are a thing. By themselves, they are neither good nor bad. How they're applied is the difference. If a tax cut causes government revenues to drop to the point where they can no longer properly fund public schools, it's not the wealthy that are going to be hurt by it.
Except that tax cuts basically mean the government has less money to pay for things. I suppose if you don't rely on government for anything (like infrastructure to run your business) then that's good. Otherwise it is bad.
The government is a huge entity that does some very important things and wastes a lot of money (some of which being pork that it seems every party indulges in), simply assuming that cutting off the cash flow is going to improve anything is wishful thinking I think.
You know certain things will be funded (like the military) but a lot of basic services to the needy always seem to be on the chopping block despite costing a fraction of the budget (food stamps, nutritional assistance to pregnant mothers, etc).
Since you're using a ridiculous analogy here, one can easily point to CAFE standards that have dramatically increased the efficiency of cars over the past 20 years by doing exactly what you're describing - cutting the fuel...
In my lifetime I've never seen a government program cut costs or gain efficiency. At the point something like that happens I'll be much more open to government programs. In the current environment both in terms of bloat and political hostility, it's really hard to see any benefit.
Rather than worry about throwing more tax money at the problem, why not focus on how much better things would be if the department was 10% more efficient?
Can you point to any specifics about what is inefficient? I'm not doubting that it is the case, but when you say you've never seen it is that because its never happened right in front of you or you've looked hard for it and it just isn't there? I'm not trying to be a jerk, but I think we all have a tendency to criticize things we don't understand as well as we would like to think and I try to resist that urge unless I actually know a lot of details. After being a developer for a few years, I'm a lot less likely to criticize some piece of software or code someone else has written until I actually analyze it myself and try to improve it, often times I find there are reasons for a lot of the corners that were cut or hacks that were implemented. Not always, but as often as not I can't actually improve something as much as I would have initially assumed.
You obviously have no comparative data, relevant associates or historical acumen whatsoever. Dare to say something exceedingly smart, discerning and not wish fulfilling. Noise obscures any possible policy signal. All "old saw" claims of "what everyone knows" only subtract from value creation, good planning and sound accounting. That will remain true tomorrow and 10 years from now.
Stay away from needy or greedy cheerleaders spewing nonsense. Just wait and some dummy will a wave a flag next.
This isn’t a bad thing. That money won’t dissapear. It’ll get spent or invested (either directly or indirectly by a bank if saved).
Tax cuts are good. Stop saying they’re bad. The wealthy always find loopholes because they can afford lawyers and accountats to deduct taxes or skip taxes through offshore companies, so it’s the not-so-wealthy who have a yet bigger impact but not so directly visible.