> This is basically arguing the world works best when the rich buy bigger yachts instead of bigger factories.
Yachts are wealth that would be taxed. And in fact, assuming you are taxing the rich based on their wealth/property/ and income then you are in fact incentivizing them to buy bigger factories rather than yachts. The bigger factory generates more wealth for them while not being taxed because it isn't directly owned by them. A yacht only costs them money.
> All of this wealth the rich have isn't gold coins in a giant vault like scrooge McDuck, it's a sheet of paper that says they own .3% of Microsoft.
And what do those sheets of paper do? Do they create jobs? Do they employ people?
The problem with the investment ownership model is it's completely speculative without any actual feedback into the economy. The only difference between the paper that grants ownership of microsoft and the paper that allows you to pay back debt is one has speculative value for trade. Because the value of the sheet of paper is based on what the market values that sheet of paper as, it creates perverse incentives that aren't actually economically good. For example, the last couple of years when tech businesses hired a bunch of employees because that made the stock go up, then fired a bunch of employees because that make the stock go up. Businesses are being ran not based on whether or not the goods are being sold or valuable, but rather whether or not the speculators in the market think it's good or valuable. That's a major negative distortion of the market.
The entire point of stock isn't bigger factories, it's to enable bigger yachts.
Stock as compensation, particularly for business owners, is one of the worst inventions of society. It is what causes enshittification.
> if we just fixed it by incentivizing the rich to spend more money on consumer goods we'd have more workers building mansions vs homes.
Right, but as you point out, that's not what the rich are doing. They are instead buying paper that does not feed back into the economy. But further, there are only so many consumer good someone could buy before they are completely satiated. There's only so much bread one person needs. There are limits to the bed or computer someone could buy. We are at the point where the wealth literally have more money than they can spend and that's part of the problem.
> Not to mention we are currently do not have that problem, which is why we have inflation above target.
We have inflation above target because businesses have merged and consolidated to the point where they can aggressively raise prices not because they need to but because they have the general population over a barrel. Collusion and speculation is a big factor in a lot of the inflation.
That's not universally true, after all egg price inflation has been due to herd culling for bird flu. It is however fairly true and something that businesses are bragging about during their quarterly shareholder meetings.
> creating tax incentives so the rich spend more money in an economy that is already on the verge of overheating isn't one of them.
Where and how they spend their money matters. And part of the defense against further inflation can be more taxes/regulations. For example, vacancy taxes for residential units which would help pull back the real-estate market.