That’s the term the Left and the media use. Even conservative media people and some Republicans use it. It’s wrong.
It’s not the rich. It’s people who want to be rich. It’s people with high incomes. It’s people running small businesses as LLCs and Sub-S corps that get funneled into the same tax category with people making high salaries. These people are working like hell to use their limited capital as efficiently as possible, to get the highest possible return. The successful high-earners among them are some of the most creative and productive people in our society. They create the jobs. The best of their small companies eventually become large companies and create tremendous wealth for their founders, shareholders, employees, contractors, suppliers and customers — all of us.
The higher we set the rates at which we tax these highly productive people on their incomes and capital gains, the lower will be the returns they earn on their capital and therefore the less they will invest. The less they invest, the less they will create. The less they create, the less wealth there will be for all of us. Scrooge McDuck, sitting on piles of idle money, isn’t affected by high income- or cap-gains tax rates. Nor is he creating much by keeping his money idle. But a guy who has most of his net worth tied up in a successful business has a lot to lose and will be trying to earn the highest possible return on his capital and effort. Make him a target, reduce his returns by singling out high earners for tax-rate increases, and he will invest less and work less, and therefore will create less and hire less.
We should be encouraging such people, not looting their capital to buy votes.
UPDATE: Robert Schwartz adds many good points in the comments.
