Originally Posted by
Hobbit
Incorrect. You think rich people simply hide their money in a mattress? Hell no. Some of it is in banks, the rest is in the stock market.
Banks use the money to give out loans, about 80% of it, in fact (if I remember correctly, average minimum reserves is 20%). Those loans go mainly towards houses, cars, and small businesses, all of which contribute greatly to the economy. In fact, small business is the leading creator of jobs, and most small businesses start with a loan (after they make the business plan to present to a bank loan officer).
The stock market, well, is simple. If you don't know how stock market investments improve the economy, then it's really not worth it to debate this with you, but if you honestly don't know, money that goes into the stock market goes directly into investments by publicly traded companies. Those companies use this extra capital to expand, thus creating new jobs and stimulating the economy.
These two investments, in fact, contribute a great deal more to the economy than the impulsive, wasteful spending of the lower class. Just look at who buys lottery tickets and the fact that that money causes zero economic growth.
As to loosecannon's post, I think our best deal was taxing consumption. For a long time, our country could fund itself on far less intrusive taxes than an income tax, and the income tax, by its very definition, slows the economy by removing VAST sums of money from it before those funds are even spent. This is why I support the FairTax. Also, if taxing the rich is such a good idea, then how come states with very progressive income taxes (i.e. California) lag far behind states with no income tax at all in terms of economic growth (i.e. Texas). In fact, the states with no income tax are the fastest growing economies in the Western Hemisphere (with economically free countries like Singapore and Hong Kong growing faster). In fact, taxing income, and the income of the wealthy more so, is only a good idea if the end goal is political power, rather than an efficient form of funding the government. It's monolithic, slows economic growth by leaps and bounds, and is pretty easy to avoid.