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Re: [Update 2] PM Boris forms a government
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increasing taxes on the rich actually reduces our prosperity
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Define "rich"?
Are you talking about wealth, income, or both, and if so, what levels?
Also, you may find this informative
https://www.investopedia.com/articles/07/tax_cuts.asp
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Tax Cuts and the Economy
It's a common belief that reducing marginal tax rates would spur economic growth. The idea is that lower tax rates will give people more after-tax income that could be used to buy more goods and services. This is a demand-side argument to support a tax reduction as an expansionary fiscal stimulus. Further, reduced tax rates could boost saving and investment, which would increase the productive capacity of the economy and productivity.
However, studies have shown that this isn't necessarily true. Data collected over 25 years by the Bureau of Labor Statistics shows that high income earners spend much less for every tax dollar saved, than low income earners — 86 cents versus 48 cents respectively. Further, a 65-year study by the Congressional Research Service showed that economic growth was not correlated with changes in the top marginal tax and capital gains rate. In other words, economic growth is largely unaffected by how much tax the wealthy pay. Growth is more likely to spur if lower income earners get a tax cut.
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Last edited by Hugh; 28-07-2019 at 10:54.
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