It seems that nearly every liberal I talk to thinks that taxing the rich is the equivalent to getting free money. In case you're wondering, it's not. The fact of the matter is, no matter who you tax, the middle and lower class feel it.
The primary example that needs to be looked at is the small business. Liberals keep insisting that they're going to start popping up, and fix the economy. The fact of the matter is, they aren't going to while the rich are getting taxed so much more heavily than everyone else. I think I can paint you a picture to get an idea why.
In order to start nearly any type of business, you need to fill a number of roles. One of those roles is an investor. The investor throws a bunch of money at the business to own a percentage of it. Let's say he invests thinking that there's a 75% chance that his percentage of the business will be worth twice what he put into it in about two years, on the other hand if the business fails, he probably won't see much if any of his investment back. If you don't take taxes into account, he's statistically better off by making the investment, which will get the small business started. If you tax the rich at a high rate, let's say 40%, the investor will actually lose money on average by investing in the small business.
A smart investor in that situation would just hold on to his money, and there would be no startup, and thus no economic activity. Right now, the tax rate for the rich in America is about 35%, and we aren't seeing many people willing to invest in startups. I guarantee you it's not because the people with money are stupid.
Progressive and regressive tax schemes both have significant negative effects on the economy. The one we've got right now in addition to being too Progressive, also suffers from a ridiculous amount of overhead, and lots of the loopholes that unscrupulous rich people are taking advantage of. Except for the fact that there are so many people who think that taxing the rich is free money, a flat tax would be dramatically better than our current system.
As far as fixing the stock market goes, I agree with you 100%. Stock market regulation is one of the better ideas that was on our current president's platform. He hasn't come through with it, but I hope that gets done soon, and better than health care.
Regarding our political parties, I hate both of them. The Republicans are corrupt warmongers whose morals come solely from the Bible. Democrats have no idea of fiscal responsibility (although I admit they did surprisingly well during the Clinton administration). Both parties hold their own interests higher than the interests of the country, and I hope we as a country never have to put up with either of them controlling the House, Senate, and Presidency again. I know it's going to happen again, but I can dream that it won't.