Tuesday, November 4, 2008

 

Redistribution and Forced Saving

I was just thinking about Obama's plan to increase taxes on the rich, and the recession. Contrary to what some people say, the tax increase won't worsen the recession. Rich people save a lot, so taxing them during a recession is not especially bad. It will reduce longterm growth, though, by reducing national saving.

If you think that people--rich and poor-- do not save enough, then maybe you should oppose this tax cut. It would be better to redistribute towards the rich, so saving will go up.

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