The paper examines the short-run and long-run consequences of shifting the tax burden from the middle class to the rich in terms of an extended version of Solow's growth model with two classes of people separated by differential saving rates. Under certain circumstances, the middle class tax relief at the expense of the rich makes everyone worse off in the long run. It is also argued that an increase in the saving rate of the low saving class is the most effective means to reduce the income disparity between classes. [041]
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