Can someone explain this to me? I realize that I'm posting on a game forum, but there seems to be a lot of people out there that talk like they know something about economics, so I thought I'd ask.
Here's my understanding of the theory - tax breaks for the wealthy results in more spending by the wealthy which results in a boost to the economy.
However, the problem I have understanding this is that the wealthy are more likely to travel abroad, drive imports, buy property in the Caribbean, and worst of all have off shore bank accounts. I'm not saying that all the money they get from a tax break would go to these things, but they are much more likely to with the upper 5% than for the lower 95%.
So, in my mind, if there's a tax break of $200 000 for one rich person, some of that will go into the domestic economy, but some of it won't.
On the other hand, if there is a tax break of $200 for 1000 working class and middle class people, that money is almost certain to go into their Chrysler mini vans, the mortgage or new porch on their house, their new gaming rig, or their vacation in Vegas etc.
I think I'm missing something critical here. Please post if you can explain this to me.