1. When more money doesn't provide more happiness (call it satisfaction or utility, if you will), people stop trying to earn more money. Until then, more money, by definition, buys more happiness.
2. It is impossible to make interpersonal utility comparisons which show that taking money from the rich and giving it to the poor increases the total sum of happiness. There is no such thing as a social welfare function. Those who think there is such a thing must be willing to submit to robbery by poorer persons.
3. There is no such thing as "the economy"; there are crude aggregate measures of economic activity by individuals and firms. Therefore, leisure per se isn't "bad" for "the economy." After all, leisure (when sought) adds to the utility of the person who obtains it. The only time leisure is bad is when someone is taxed to support someone else's leisure.