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Capitalism is by very definition going to create a divide between the rich and the poor. The masses have an incentive to become rich, which being the relative description it is, implies the presence of the poor.
So the real question here is firstly what is economic health, and secondly what creates a healthier economy:
a) a totally unrestricted top heavy capitalist economy and thus low taxes all the way...

b) or a more balanced economy with a better distribution of wealth.

With regards to how to "measure" economic health, we could go for the widely used GDP of the country which if we look at the normal way of calculating it would be thus:
GDP = consumption + investment + (government spending) + (exports imports)
This would imply that higher taxes do indeed increase the economic "health" per se. However we have to consider the source of the taxation which is the consumer and businesses and we can see that this is obviously going to affect other parts of the formula and proves that actually its more of a balancing act. however this measurement doesn't really measure standard of living or the distribution of the wealth, and a economy cannot be called healthy, I think, when people are living below the poverty line and don't have the essentials of life to use, while their neighbour lives in a palace, then the economy cannot be morally deemed "healthy".

Of course, when we look at society as a whole there always will be some people more richer than others, and I don't agree with the communist principles of equality, because that inhibits entrepreneurship and thus the economy.

What I'm agreeing with is a mixture of the capitalist and the socialist philosophies, which is exactly what we see today across the world. But as to the weighting of the two philosophies in an economy, in a sense that is what really taxes represent (assuming of course that it is one of the governments priorities to uphold socialist values).

So low taxes favour a capitalist economy while higher taxes a socialist economy.
I would argue that it would be more beneficial to the economy to apportion some of the wealth to the poor, who firstly all need to be taken out of primary poverty, and then slowly encouraged to contribute to the economy themselves. This may cost a little in taxes, but the overall effect will be more people in business, more money being generated and a stronger economy - and vitally we even score on the standard of living factor to success.

Learn more about this author, Ibrahim Khan.
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