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 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.
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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