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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (45700)	9/8/2010 12:13:45 AM
From: TimF	2 Recommendations Read Replies (1) \| Respond to of 71588

The thrust of the economic argument (as even you seem to acknowledge) is that a DOLLAR of tax cuts remaining in the hands of middle class or lower class individuals has more of it diverted to spending than the exact same Dollar in the hands of the top-most marginal tax bracket... ...You refer to this characteristic as the "marginal propensity to spend an extra dollar", which of course it is!. That's what the discussion is about. The data does show that the rich put a lower percentage of their total income in to consumer spending than the non-rich but that data does not imply that the rich will spend less of each new dollar at the margin. Those are two different point. Which is why, in response to "We know that higher income households are more likely to bank the cash than spend it", I replied with "No we don't know that. We do know that higher income people save or invest a larger percentage of their income. That doesn't mean they save or invest more of the next marginal dollar under any circumstances, or in the particular situation of our economy." Message 26792568