by Art West

Created on: September 14, 2010   Last Updated: September 15, 2010

"Let's raise taxes on the rich!" That's a popular cry from the liberals.  It sounds good, but how good of an idea is it really?

If the rich get to keep more of their money, what will they do with it?  There are only three things that you can do with money.  You can save it, spend it or give it away.

Obviously it is good if they give it away. That means they are giving to a

charity which in turn is helping people. Another way they can give money away is by giving large tips when they go out to eat or travel. The third way they can give money away is to find someone that needs money and give it to them directly. The last on this list is obviously quite rare but it does happen occasionally.

You can also save money. If you save money, you are simply putting it in a bank account, but what does the bank do with that money? They invest it. So even when you say someone is saving money, it is really being invested. What happens to money that is invested? A good company is going to use that money to either buy more material so they can make more products or  improve their machinery, equipment or building to make the work area better and more efficient.  Buying more materials is good because that means more materials will have to be made which in turn means the companies making these materials will need to hire more workers.  If they are fixing machinery, equipment or buildings, that means people need to be hired to fix the things are being updated. 

The final thing they could do is spend the money. There are several ways they could spend money. They could buy expensive items like new cars or yachts. They could take trips or have parties at their mansions. They also could hire maids, butlers or gardeners. Any of those ways to spend money will create jobs.

The bottom line is raising taxes on the rich is not a good idea if you want the economy to grow; for that matter, raising taxes on anyone is not a good idea to grow the economy.  Research has indicated that when tax rates are low, revenues increase.  The only people that would want to raise taxes are those who want to stagnate the economy.

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