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President Clinton's Economic Plan

President Clinton unveiled his economic plan to stimulate the economy and to reduce the deficit. Although his plan calls for cutting spending, at the heart of the program is a substantial increase in tax rates for individuals as well as for corporations. Personal income tax rates will be increased up to 40% for incomes above $250,000. Corporate income taxes will be increased to 36% from 34%. On the other hand, spending reductions will accrue mostly in defense and in the trimming of administrative costs. The issue to be faced is whether the Clinton plan will serve its dual purpose of stimulating the economy and reducing the deficit, and each side has its proponents.

Murray L. Weidenbaum, a professor at Washington University in St. Louis, calls for increased budget cuts and decreased spending to address these national economic problems, and he states: "In the current environment, an increase in taxes is a confession of failure to control spending" (p. 111). He would see the Clinton plan as such a confession of failure, while Patrick M. Boarman, Professor of Economics at National University in San Diego, is much more concerned with the need to reduce the deficit and feels that increasing the marginal income tax rates on persons across the board can reduce the budget deficit. He states that increasing the marginal tax rates has an effect at the microeconomic level that is visually imperceptible and yet yields revenues that in macroeconomic terms can make a significant contribution toward reducing the deficit.

Yet, professor Boarman recognizes how difficult this is to accomplish given the fear Americans have of increased taxes, a fear Boarman calls "taxophobia". Boarman simply feels that American's most effective revenue-producer is and remains the personal income tax and concludes that "the power to tax is the power to bring a destructive deficit under control and thus to change for the better our economic lot".

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President Clinton's Economic Plan. (1969, December 31). In LotsofEssays.com. Retrieved 08:47, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1692290.html