I'm not saying you are wrong that some redistribution can be good, but your analysis is simplistic and ignores many factors. You can just redistribute and then say 'well people will spend the money'. That's literally the 'Broken Window' fallacy from economics. You are ignoring that if you don't redistribute it, money also gets spend, just differently. Also, the central bank is targeting AD, so you're not actually increasing nominal income by redistributing.
Take a million dollars, give 1,000 poor people $1,000 and every dollar will be spent on goods and services. The companies running those services and making those goods will need to have their employees work more hours, putting more money back in poor people’s pockets in addition to the money the companies make. Those employees have a few extra dollars to spend on goods and services, etc.
Give a rich person a million dollars, and they will put it in an offshore tax shelter. That’s not exactly driving economic activity.
You are simply disagreeing with 99% of economists.
Money in tax shelter doesn't go threw a portal in another universe. Its either invested or saved as some kind of asset and in that form is in circulation. And again, even if you assume it increases monetary demand (decreases velocity) the central bank targets AD and balances that out.
Based on your logic, a country that taxes 100% of all income and redistrubtes it would become infinity rich. Your logic is basically 'if nobody saves and everybody spends all income' everybody will be better off.
This is not how the economy works even if it feels good to think that. Its a fallacy.
Where you could have a point is that potentially the tax impact is slightly different, but that's hard to prove.
This feels like you intentionally gave this the least charitable reading. Obviously, I do not think that you could just scale to infinity. If I had said that eating a banana was healthier, I don't think it would be reasonable to say that assertion is ridiculous because that would mean eating 1,000 bananas would make someone the healthiest person. I was pointing out the difference in economic activity, where additional money to a wealthy individual mostly goes into savings/investing while additional money to low-income individuals mostly goes directly into consumption, and that the higher consumption generates more economic activity.
> Take a million dollars, give 1,000 poor people $1,000 and every dollar will be spent on goods and services.
If we're being realistic a bunch of this will go to paying off existing debt. Still good, but not the economic stimulus you're imagining. There are also "services" like gambling apps that act as a sponge to soak up money from those foolish enough to use them and transfer that money back to the wealthy shareholders. I'm sure there is research on what percentage of that $1000 can be expected to stimulate the economy, but it's not 100%.
There are many ways of spending money in the population that don't include just "distribution of money", as it's portrayed nowadays. Child care, free and high quality schools, free transportation, free or subsidized healthcare, investment is labor-intensive industries, these are all examples of expenditures that translate in better quality of life and also improve competitiveness for the country.
