Some people want to argue that increasing taxes on the rich would hurt our economy. They are wrong.
Economic inequality is growing in America because our tax system taxes labor too much and capital too little. As a result, fewer and fewer workers can ever accumulate enough wealth to become “capitalists” — some have called this the fading American dream.
Over the past 40 years, this country has repeatedly slashed taxes on the rich while they continued to invest more and more of their capital gains outside of the United States. That may have helped investors but it didn’t help the American economy.
Supply-side economics was always a fraud. Demand-side economics is the only theory that has ever worked. Without consumer demand, no product will ever be produced, no worker will ever be paid and no investor will ever make a profit. Capital investment chases demand, it doesn’t create it.
Economies grow when consumer demand grows. We can increase demand by raising taxes on the rich and cutting them for everyone else. Some call that socialism. But that isn’t socialism, it’s democracy. Voting to increase taxes on the rich would simply be American workers voting to give themselves a pay raise after 50 years without one. And the first thing Americans do when they get a pay raise is go shopping. Sounds like democracy and capitalism to me.