I count that as saving, since it's just paying down debt. Multi-billionaire's spend money all of the time. Big houses, lots of cars, travel, investments, etc. And I'm not advocating giving money to "ultra-wealthy".
Sure, but they don't spend proportionally to their net worth compared to middle class people.
Here's an example. Let's say the average home costs $500K and the average middle-income person earns $50K. This average home buyer needs to spend 10X his salary to buy this home.
Let's consider somebody who we consider "ultra-wealthy". Let's say he earns $10 million per year. For this person to spend a proportional amount on his home, he'd have to spend $100 million.
Even the most insanely wealthy hardly EVER buys a $100 million home, but comparatively speaking with a $50K earner, that is the AVERAGE price that a $10 million earner to have spend to have the same economic impact as 200 individual $50K earners do.
Obama wants to raise taxes on everyone making more than $250,000 a year. That would have a definite impact on small business.
Did you read what I posted? Most small business earn less than $250K per year. A great many lose money. I see tons of small businesses (especially restaurants) open up and close shop within 6 months. This happens ALL THE time.
I'm assuming all businesses want to expand, but run into funding issues.
You can't get blood out of a turnip. There's no point in expanding if the customers that you hope to target have no money to spend.
Yes, but there would be more incentive to find and exploit those loopholes.
The incentive is already there. Don't kid yourself. If a loophole exists, that alone is incentive enough to exploit it. It wouldn't matter if the highest marginal tax rate is 10%. The way the ultra-wealthy think, 10% of $10 million is still a lot of money in absolute terms.
The solution is to get rid of the loopholes and set the tax rate to the same amount for everyone. No one can claim unfairness, and "ultra-wealthy" can't shift their money around to avoid paying taxes.
You don't seem to grasp the fact that the less wealthy have to spend a larger proportion of their net worth for the basic necessities of life.
The less wealthy have to borrow money to buy the most meager home available. A person making $10 million per year can buy one of the most luxurious homes available in cash and have money left over.
A person making $100 per day (~ $20K annual salary) spends $5 for lunch at McDonald's, that's 5% of his daily income.
A person making $1000 per day (~$200K annual salary) would need to spend $50 per day for lunch. I don't know many $200K earners that spend $50 per day on lunch. They *may* spend $15 to $20. The thing is that they also have the option to spend $5 at McDonald's.
The only option for the $20K earner to spend proportionally equivalent would be to buy 50 cent candy bar. Or starve.
There's no "fairness" to having the same tax rate for everyone. It's regressive and worst of all, it will reduce tax revenues for the government meaning we'll have to deficit spend.