A tax break for Rich Person(s).

As a follow-up to the last post:

What if high earners could deduct every single dollar they earn above a certain threshold?

The only requirements would be that they would have to spend said dollars on non-durable goods/services, and said dollars would have to be spent domestically. (Deductions or tax credits on energy efficiency goods would be separate.) Perhaps we could add in deductions on construction costs minus added property value.

This will encourage Rich Person to hire his maid and chef, encourage him to support local businesses, restaurants, etc. Rich Person can still enjoy the good life, and others will benefit from his enjoyment of it. It will stimulate the economy. It will support and create jobs. It will help stem the flow of money to the very top, and thus help stabilize both society and the economy.

Otherwise, taxes are collected and go through the IRS into the government, and the government decides how it is spent. Some of it will come back to the local poor folks through various programs: welfare, medicaid, etc. And some of it will be spent on helping poor people in Afghanistan and some on killing other poor people in Afghanistan.

If you are a Rich Person, and you like how the government uses this money, you would certainly be free to not spend your money and to pay taxes on it instead.

If you spend it, the IRS will still get some of it through increased earnings of people in the businesses thus supported. But also, local governments and programs will benefit through increased sales tax revenues. The local schools may improve. Local employment rates will improve. Maybe the crime rate will drop. It could have all sorts of benefits.

So, maybe the wing-nuts on the right are right after all. Maybe cutting taxes on the rich can help heal all that ails us. The theory is that Rich Person will spend the money, businesses will be created, jobs will be created, etc. This seems to make sense. But he has to spend or it doesn't work, and it has to be spent in certain ways. This tax deduction may be how to make it happen.