Taxes

When the government pays interest on the debt it is paying this to the people who own government bonds. Higher interest rates mean more money going into the economy to spur growth. To go to negative interest rates is a way to take money out of the economy and would be akin to a wealth tax. If you have a one percent negative interest rate the $100 you invested this year is worth $99 next year and if you have a one percent wealth tax your $100 becomes $99. The wealth tax like any tax takes money out of the economy and slows growth. MMT says to increase economic activity you reduce taxes to put more money in the hands of consumers but you must reduce taxes in the proper area. If you reduce tax on a millionaire he will not spend that much more but if you reduce tax on a working man he will spend. If you reduce taxes on small business the owners will invest in ways to grow their business. Lowering taxes on large corporations may increase growth but it is more likely to be spent on mergers and acquisition which do not expand growth. Tax reductions are best utilized if they are targeted to middle income workers and small businesses.