Half the Australian businesses that got a tax cut have banked the cash Half the Australian businesse, page-62

Australia is a currency issuing monetary sovereign. As such, it can never run out of money or be forced to default on any debt obligations. About 97% of the currency is held electronically. Like one giant spread sheet where every account held has its own column. When the government spends more than it collects back as taxes, it simply has the RBA mark up the accounts of those accounts it wishes to make payments to. The governments deficit is the private sectors surplus. The government can also remove large sums of money from the economy in the form of bond sales. This takes place "after" the government increases its deficit. A bond is exactly the same as a fixed term deposit account only this is held outside of the domestic economy at the RBA. As the issuer of the currency, the government is not revenue dependant. It doesn't have a bank account where collected taxes go to until it decides how to spend it. The purpose of taxation is primarily to create and maintain demand for its currency. You need it's currency to pay your taxes so there is the demand. Secondly taxation is used to control inflation by dampening down the spending power of the people. Taxation is certainly not theft, though it sometimes feels like your being robbed. Imagine the level of inflation if there was no taxation. Tax cuts for business doesn't create jobs. Businesses with more customers ie increased demand is what creates jobs. Putting more money into the hands of those with the highest propensity to spend it ie low and middle income earners, has the greatest positive affect on demand. If you owned a business with 100 employees and the value of the tax cut meant you could afford to hire 5 more people, but you have no more customers than you did before the tax cut, would you hire those 5 people? Of course you wouldn't. If demand for the goods or services you provide doesn't increase, those 5 new employees won't have anything to do other that reduce the workload of the current employees. That would be what they call reducing productivity. #learnmmt