Public Cost

The policy of Public Cost supposes, as it already said the Keyneses, that the State influences in the demand added through public works, for example. This way, it is generated use and wealth, and in addition, part of this wealth is spent as well in other things the call multiplication effect, by which if the Government invests, for example 100,000 million Euros, the effect in the economy are 160,000 million. And in addition infrastructures are created, that are used basic for a future growth (in this it is important that the money is used well, something that in Spain has become by halves, since in the famous plan of 8,000 million for the city councils there was a little whole). Nevertheless, the liberal ones argue that the multiplication effect by means of this method is smaller, since leaves from the use and of the demand that it generates the Public Cost is replacing that would make the companies private. On the other hand, the reductions of taxes can stimulate the economy, since they can increase to the consumption (people have more money to spend) and the investment (the companies can invest more), and can improve the competitiveness with respect to other countries (the different fiscality can favor to France with respect to Spain, for example).

In return to these arguments, in a situation like the present one it is probable that great part of the saving that receives the citizens through the taxes saves (as therefore demonstrates the increase to it of the rate of saving until unusual a 24%), consequently a clear increase of the consumption is not obtained. In addition, it is possible that the smaller impact of the taxes in the companies simply serves to them to cover holes or to take to the things a little better, but does not stop to invest more. With respect to the slopes of taxes, to comment in addition that they have a complexity greater than is clear habitually by the political parties, since there are direct taxes, like the Rent, that are progressive, and according to which who more desire, pays more, and not only proportionally, but a greater percentage. And there are indirect taxes, like the IVA (that is another one of the proposals that are heard), that pays everybody the same, independent of its rent. There would be even one third leg with which some play, that are the possible slopes of the quotes to the Social Security (and which also they would harm more to the lowest rents, than no they can accede to the health or private plans of pensions).

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