Quote:
Originally Posted by ForceoftheTruth";p="
In thinking about economic theory, I recognized one of the key obstacles to growth. The wealthier people become, the lower the percentage of their income and net worth they are likely to spend. This is because the poor and, to a lesser extent, the middle class are forced to spend their money on necessities. Ironically, therefore, the very luxury spending for which the wealthy are so criticized is beneficial to the economy, while their savings put a fundamental limit on economic growth. However, I recognize that any government measures attempting to change this pattern would be extremely inflationary. I appreciate all input on this subject. Thank you very much.
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True; the poor spend a bigger percentage of their income on necessities, but the rich spend a lot of money. Don't kid yourself on that one. And everytime the rich goes out to a high-end restaurant, a play, or takes a vacation somewhere....they are helping to pay someone else's salary and benefits. All that is beneficial to the economy. Plus, they invest in the stock market. What is the stock market, but investment in companies...large AND small.
So, I don't agree with your analysis of economic theory.
Several years ago, the Congress legislated a "luxury tax" for things like cars over a certain price and Yachts and boats over a certain price. They soon discovered that while they were trying to "hurt the rich"....all they did was "hurt the working man." Many jobs in the yacht industry were lost.....everything from salesmen to the men who built them.
It's now been reversed.