bdbdbd said:
But they do. If income tax is raised, you need to raise wages so that you earn same as you did before, which turns to raising prices for customers. If you tax wealth - which usually is shares or apartments and such - your wealth need to create more income to pay the taxes. More dividents require higher prices, you need to raise rents if they tax your apts you're renting and so on. The money has to some somewhere always and in a modern capitalistic society it comes from the market. |
Income and property taxes have a positive net effect in economy, kinda of. It's a misconception the money from the rich come exclusively from running bussines
If you take a bit of money from the upper high classes, money that would generally be invested in long term funds and financial applications outside the country, and give them to very low income citzens, what happens?
Well, low income citizens will start buying essential goods. Food, water, maybe clothing. This higher consumer spending will make small and local bussines to earn more money, expand, hire. It will also increase demand for industry and services. The overall GDP will increase, and the state can even recoup some of this spending through other taxes
This can drive inflation, of course. But not because the rich was getting taxed, but because more people are looking for groceries
