Wednesday, January 07, 2009

I like this point:
Investment tax credits or other subsidies for private-sector investment are not as politically appealing as tax cuts for consumers or increases in government expenditure. But if private investment doesn't increase, where will the extra consumption come from in the future?
Let me expand on this. By promising investment tax credits, Congress could indirectly increase investment far faster than the government can directly invest money in worthwhile projects. Also, if giving money to state governments to encourage them not to cut existing services is such a great idea (I'm not convinced it is.), then shouldn't we also use the tax code to encourage businesses not to decrease their current level of investment?

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