Rebuttal on Letter to Editor: "Taxing the rich will be bad for everyone."

Here's my rebuttal to a letter posted in the Bellingham Herald (WA) on Sep 30, 2008. Original letter in mixed case, my rebuttal is in all caps:

"Taxing the rich will be bad for everyone"

I have been reading how so many resent people resent the "rich" and how they must be taxed more and more to help the less fortunate.

YES ME TOO.

If the "rich" money goes to taxes, it is taken out of the local economy.

THE MARGINAL BENEFIT OF A RICH PERSON GETTING MORE MONEY DEGRADES WITH EVERY ADDITIONAL DOLLAR. A RICH PERSON IS KNOWN TO BE RICH BECAUSE THEY HAVE MONEY IN THE BANK VICE IN CIRCULATION. PEOPLE KNOWN FOR SPENDING A LOT IN THE LOCAL ECONOMY WITHOUT FIRST HAVING MUCH MORE MONEY IN THE BANK ARE NOT KNOWN AS RICH BUT FOOLISH.

There will be nothing to spend in the community. This would eliminate the large charitable donations to all the unfunded community projects.

THE COMMUNITY PROJECTS ARE UNFUNDED BECAUSE FEDERAL AND STATE TAX RECEIPTS ARE NOT LARGE ENOUGH FOR NON-ESSENTIAL PROGRAMS IN ADDITION TO SUPPORTING EXISTING ENTITLEMENT PROGRAMS. IF THE LOWER INCOME LEVELS ARE TAXED LESS, THE MARGINAL BENEFITS OF EXTRA MONEY IN THEIR POCKETS ARE FAR HIGHER THAN THOSE EXPERIENCED BY THE RICH.

What about the local businesses that would no longer be patronized because there would not be "rich" people spending their money locally?

YOU MEAN GUCCI, FERRARI, ETC? OK, I CAN LIVE WITH THAT. PEOPLE OF LESSER MEANS WILL STILL BURN THROUGH THE EXTRA CASH IN THEIR POCKET (AT FAR GREATER NET RATES) AND HAVE LESS REASON TO RELY ON GOVT ENTITLEMENT PROGRAMS.

IF THE RICH ARE SUFFICIENTLY UPSET WITH HIGHER TAXES, THEY CAN ALWAYS WORK HARDER AND EMPLOY MORE OF THE UNDER EMPLOYED, POOR AND MIDDLE CLASS TO DRIVE UP THEIR NET PROFITS

They would not be buying new homes.

OK, I CAN LIVE WITH THAT. I SUSPECT IT'S BETTER TO HAVE MORE SUFFICIENTLY EMPOWERED MIDDLE CLASS BUYING 50 OR MORE HOMES FOR EVERY ONE RICH CAT HOME.

... vehicles, farm equipment, expanding businesses, booking vacation trips, investing with local brokers, etc. It would not be long before most businesses would no longer exist to hire local people, stores would be nearly empty, demands on the food banks would increase, lower-income people would have even less than they have now.

WHAT YOU SAY IS GARBAGE. ABOUT THE ONLY NEGATIVE OF SIGNIFICANCE IS THAT THERE WOULD BE FEWER ECONOMIES OF SCALE. MORE LITTLE BUSINESSES WILL BE EMPOWERED TO PROSPER AS COMPARED TO SMALLER NUMBERS OF LARGE BUSINESSES. THESE LITTLE BUSINESSES HAVE HIGHER COSTS ASSOCIATED WITH THEM. HIGHER COSTS ARE DUE TO COSTS OF CAPITAL (INTEREST RATE PAID) AND LESSER ABILITY TO DISTRIBUTE THEIR "FIXED COSTS" LIKE THE BIG BUSINESS. THESE HIGHER COSTS WILL BE PAST ON TO SHOPPERS IN THE FORM OF HIGHER PRICES. PAYING HIGHER PRICES IS A SMALL CONSEQUENCE WE MAY EXPERIENCE BY PULLING UP THE LOWER AND MIDDLE CLASSES BY THE BOOT STRAPS.

Think seriously about what you ask for - you may get nothing instead of a chance to have things continue to get better. Take care of your community and it will take care of you. Taxes only go into a big, black hole where only a very small percentage ever comes back to the community.

I DO NOT INTEND TO TALK ABOUT THE GALAXY OR BLACK HOLES. NO REBUTTAL NECESSARY.