Tag: consumption

Bottom-Up Tax Cut

Consumption by income

Tax cuts should go to the lowest income earners. When they pay less to the tax man— they will still be paying FICA, property, and sales taxes— they spend that extra cash. More money will flow through all levels of the economy. This will grow GDP, because consumer expenditures comprise 75% of all GDP activity.…

Aggregate Effects of the Top 1%

Consumers drive 70% of GDP. Earners in the top 1% of income have received 93% of the income growth since the depths of the Great Recession (Bloomberg). A surprising fact about those high earners. They only consume 21% of their income (Tax Policy Center).