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Let me dumb this down....
Posted on: December 16, 2020 at 12:18:40 CT
TigerMatt MISS
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Say you are wealthy... You get tax cuts that save you $100k a year.
What do you do with that money? It is purely disposable income. Wealthy people tend to be good with money. So let's assume you are good with money. You know each year you sit on that $100k, inflation eats its value away. You don't want that to happen. So what do you do?
You invest that money. It could be real estate, it could be the stock market. Either way, your goal is to take that $100k and turn it into more money.
On the other end of the spectrum is Joe Blow. After a tax cut, he has an additional $1000 a year spread over biweekly paychecks. So every two weeks he has about an extra $38.50 in his wallet. That isn't much money, so it likely is not going into investment funds, unless he is very forward thinking.
The end result of a tax cut is for the wealthy, they have more free money to invest and grow that money. Someone who is poor has more money than they did before, but even if they do invest, there will be little growth as there is little money to start with.
So the gap between the wealthy person and the poor person will grow. It is just a natural outcome of one person having more money than another.
What do you do with that money? It is purely disposable income. Wealthy people tend to be good with money. So let's assume you are good with money. You know each year you sit on that $100k, inflation eats its value away. You don't want that to happen. So what do you do?
You invest that money. It could be real estate, it could be the stock market. Either way, your goal is to take that $100k and turn it into more money.
On the other end of the spectrum is Joe Blow. After a tax cut, he has an additional $1000 a year spread over biweekly paychecks. So every two weeks he has about an extra $38.50 in his wallet. That isn't much money, so it likely is not going into investment funds, unless he is very forward thinking.
The end result of a tax cut is for the wealthy, they have more free money to invest and grow that money. Someone who is poor has more money than they did before, but even if they do invest, there will be little growth as there is little money to start with.
So the gap between the wealthy person and the poor person will grow. It is just a natural outcome of one person having more money than another.
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Let me dumb this down.... - TigerMatt STL - 12/16 12:18:40