Strategic Planning and Budgeting

Tax inert wealth

We know that trickle-down economics doesn't work. The truth is that the more money you put in the hands of the middle & lower classes, the more money you are circulating through your economy. People that are salaried at the mean & below spend the majority of the money they make, which in turn improves the economy, and essentially trickles up into the coffers of corporations and eventually, those with the largest investment portfolios. Investors also improve the economy, so it certainly doesn't make sense to tax their investments.

 

The truth is, the only money that isn't benefiting the economy is the same money that isn't being taxed: inert wealth. Wealthy individuals or corporations with large cash reserves that are not being reinvested essentially hold captive much of the value that the economy creates.

 

So, instead of increasing taxes on income or sales, create a tax on inert wealth. Create a few basic exclusions, such as primary residences and a reasonable lower boundary, but assess a small percentage for any money that is not invested directly. Coupled with better banking practice regulations to ameliorate the possibility that large accounts would be moved offshore (something we need anyway), we have both a new source of revinue and a way to encourage more investment into the economy.

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Idea No. 2537