In my Socialized Medicine Strengthens an Economy post I have a brief paragraph about taxes, in this post I'm going to expand on it.

There has been a huge movement in this country sense the 80's, a movement against taxing the rich. It started with the idea of trickle down economics; the idea that the rich get richer an that money trickles down to the poor and middle class. Sense them the right has been pushing and passing tax breaks that mostly effect the rich. The basis for the idea can be summed up by the phrase "the rich create jobs", the rich buy more goods and services and invest more thus stimulating the economy.

The rich are rich taxing them more will not decrease investment from them especially for those for whom investment keeps them rich (they invest and get more money back). On top of that investment doesn't create jobs. Investment creates products, products meant to be sold and people have to buy those products in order for the investors to make their money back. It is the buying and selling of goods and services that creates jobs and gives incentive for inverters to invest and despite the rich individually buying more and paying more than a poor or middle class individual the poor and middle class buy more than the rich do. It's the difference between a man buying a $6000 TV and a thousand people each buying a $400 TV.

The middle class spends more on goods and services than the rich. The money spent for goods and services then goes the workers working at the businesses, to goods and services the businesses need, paying back loans and people who invested in the business. The workers buy more goods and services, the banks take the load payments and loan that money back out to other businesses and the investors take their profit and reinvest it. It is the buying and selling of goods and services that dives the economy. People buy goods and services, the providers of the goods and services use the money to pay for goods and services the providers of which use that money to pay for goods and services. The more the trading of money for goods and services goes on the stronger the economy gets.

The median income in the US is about $52,000. If people who make $200,000 to $500,000 a year pay 40% in taxes they keep $120,000 to $300,000 a year, people who make $500,000 to $1,000,000 a year pay 50% in taxes they keep $250,000 to $500,000, if people who make $1,000,000 to $2,000,000 a year pay 60% they keep $400,000 to $800,000, people who make $2,000,000 to $5,000,000 a year pay 70% they keep $600,000 to $1,500,000. Again the median income is about $52,000. The rich can afford to pay higher taxes.

Cutting taxes on the rich does not help the economy, it is cutting taxes on the poor and middle class that helps the economy. By taxing the rich the government can afford to pay what it owes and will not need to borrow billions from other countries like China.
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