Someone who was going to pay a million in taxes and now has 1 mil less is not going to put their money into the economy the same what that 1000 people with moderate income, like say restaurant workers getting $1,700 would. Those people poorer will spend all that money. I'm fortunate to be a well compensated software engineer, and I pay a huge amount of taxes. I'm not out there begging for more money (via tax reductions) and then claiming it was already my money, not a gift. That's a dishonest argument.
So when I pay 35% tax and keep 65% of what remains, did the gov't give me that 65%?
There is nothing special about current tax rates that say any reduction in taxes is "giving people money". In reality, you're "just taking less money from them".
Wealthier people spend or invest all of their money. Only drug dealers hoard cash, and that's only because they have difficulty laundering it.
I agree, but it doesn't make any sense. Investing is literally putting money to work. Storing it in a mattress is not putting it to work.
For example, what happens to the money when people buy real estate? The seller of that real estate gets the money. They don't hoard it, they also spend/invest it.
What happens to the money you put in your bank account? The bank loans it out to people who spend/invest it. (Banks don't make money hoarding cash, they make money loaning it out.)
Think about it another way. Wealthy people in general are not stupid with money, if they were they wouldn't be wealthy very long. They put it to work. That means spending it or investing it to people who spend it.
All of my well-paying tech jobs have been funded by VC money from rich people and/or IPO money from rich people. Same goes (indirectly and partially) for all the people who have been selling me goods and services over those same years.
> Same goes ... for all the people who have been selling me goods and services over those same years.
No, it doesn't. Unless you only buy services from VC-financed startups?
I buy things using my salary which trickled down from the VCs and shareholders.
That’s such a naïve statement. Those financial vehicles actually do things: provide capital for other businesses. Provide market liquidity so that capital can flow to the areas that are in demand. Grandma saving money under the mattress does a lot less than a “rich” person investing in REITs.
And then where does the money go that was spent on the investment?
Consider that a high ROI means the money is used for something useful. For example, investing into a financial vehicle that loans money to people buying a house.
Let's say the rich person buys a yacht. The yacht construction employs a large number of people. The money goes into the pockets of the people who made the yacht.
> Giving money to the rich does not trickle down to people.
For this to be true, it would follow that if all the rich people were made not-rich, it would have no material effect on the rest of the people. But that isn't how historical examples played out. Getting rid of rich people made everyone else worse off. Every time.
Many conservatives view income as "earned" and then taxes as appropriation ("taken away"). Under such a perspective it is only a return of what was originally theirs in the first place.
This country is run on deficits/debt so 1.7M less from rich people is not marginally 1.7M less to poor people.