Quote:
Originally Posted by ISiddiqui
Well, we've been talking social/ethical/moral for a while now  . Economically speaking, the rich should bear more of the tax burden because A) they can afford it far more easily and B) the poor have a higher marginal propensity to consume. By lowering taxes on the middle class and poor and raising them on the rich, you get higher consumption. You can argue that the rich will invest their extra money, but a lot of that investment money can very easily go overseas (and does). Furthermore, it has been shown, economically, that the more progressive the tax code, recessions and economic downturns become easier to deal with (for obvious reasons). Though you obviously don't want to tax the rich tooo much because they'll run overseas with it. But a few more percentage points won't do it because, well, anywhere else they'd go will have higher tax rates on the top end. |
I'd be interested to see where this came from. Many of my economics texts argued the opposite. The one thing I agree with is that the economic downturns are easier to deal with because when the low end are paying little to no taxes anyway, any loss there is negligible. Also you are right that the rich will go overseas to avoid taxes, which is why I advocate lower taxes there. If you can keep the money here, you can make up for what you don't tax in money velocity.