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| I will disagree slightly with you. Income redistribution does work to a degree because people making less money spend a higher percentage of their total income than people making more. Using that as a baseline:
-Govt taxes someone who's making 60,000/yr who spends 90% of income and saves 10% at a nominal rate of 10%. That's 6000, so they're now spending 90% of 54,000 or 48,600.
-Govt gives 6000 in tax revenue to 2 poor families in the form of food stamps. They spend every dime they make.
So instead of 54,000 total being spent, the redistribution means that the original family spent 48,600 and the 2 poor families spent 6000, totaling 54,600. That's an increase of 1.1% of total money spent.
This theory actually derives from the idea that more $$$$$$ being SPENT improves the economy and that SAVINGS do not help the economy. That said, I have a healthy savings account that I plan to spend some time (maybe equipment, maybe land, maybe at the casino when the farm goes under). I don't even endorse this redistribution. But it works to a point. I'm also not saying that the U.S. government is properly doing this.
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No Rate Increase Again
