Tax breaks for wealthy are different from tax breaks for middle class
Reader comment on: A One-Term President Obama
Submitted by benjamin (United States), Jan 26, 2010 11:20
The rich do not spend their tax breaks, they tuck them away and pad their balance sheets. Middle class and poor people are much more likely to spend a tax break, thereby stimulating the economy. Taxes targeted to those who spend are much more likely to stimulate spending, which is what our economy needs right now. When Bush passed his budget busting tax cuts for the wealthy, it helped lead to the disastrous situation we are in now. When talking about taxes, both sides of the ideological debate too often take a black and white position. No conservative would argue that we should not tax at all, and no liberal would argue we should tax at 100%. Where to set the rate to achieve the proper balance the needs of government without retarding the desire of people to work. At present, the tax rates on the rich are too low. Would hedge fund managers stop working if they were taxed at 45% instead of 39%?
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The Future of Capitalism replies:
When the rich "save" their money it doesn't just go limp and unused in a mattress somewhere. They buy municipal and Treasury bonds with the money that allow governments to hire and invest and spend. They buy corporate bonds that allow businesses to hire and invest and spend. They buy corporate stocks that allow businesses to hire and invest and spend. They fund venture capital funds that fund businesses that invest and hire and spend. I think the poor-people spending is good/rich-people saving is bad dichotomy is a false one.
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