http://www.jseydl.com/serious-economists-dont-listen-to-business-managers/
Siegel may not know it, but if the government decides to tax people
like him more and use the funds raised for high-return projects, such
as investments in education and infrastructure, then Siegel would
probably end up hiring more workers, not less. The logic is simple.
Siegel has a very low marginal propensity to consume, meaning that he
doesn't spend a large portion of his earnings. If the government taxed
Siegel at a higher rate and then put more money into the pockets of
teachers and construction workers, who do have high consuming habits,
then it would boost the demand for the products and services that
Siegel's firm sells. This, in turn, would force Siegel to hire more
workers to keep up with the growing demand. Additionally, Siegel may
benefit from this development, too, if the higher demand were to lead
to higher profits for Siegel's business.
---SPSmith
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