Nia Reedy P4/hill Should the rich have to pay higher taxes? As a lot of the American citizens know, Uncle Sam has a way of hitting a lot of bank accounts, some quite more than others. In America’s economic system there are three classes. The classes include the rich (upper-class), middle, and poor. Although the Rich is highest paid class, middle class unfortunately pays the most taxes. The rich should have to pay higher taxes because they make more money and it also stimulates our economy. A lot of people believe, “the more money you make, the more taxes you pay “, and that’s not the case most times. John Barro, journalist for business insider, wrote an article on how cnbc claim that the rich pays “all” taxes, which in fact they
Currently, the United States ' taxation system is progressive, which means the more money a person makes, the more that person is taxed. According to the Congressional Budget Office 's website,
The United States is a capitalist society; money is powerful. The wealthy and those in power are able to influence tax policy. There are a few tax policies that have more of a benefit to the wealthy than to the poor. A few of them include the mortgage interest deduction, the yacht tax deduction, rental property, business meal deduction, capital gains tax rate, estate tax, social security, and savings for retirement plans.
Generally, the income earners pay less income tax and more payroll taxes while the high-end income earners pay more income tax and less payroll taxes. The low income earners however get credit benefits as the government pays for their payroll taxes. Therefore, the high income racket still suffers the burden of individual taxes. In 2014, the bottom 20% had an effective tax rate of -4.5% while the top 1% faced an average of 24.6% a margin of 29% creates a very huge economical gap between the rich and the poor. This only ends up hurting the economy more. As a result, I believe the highest effective tax that should be applied to the top 1% should not be more than 20%. If it goes beyond 20%, they shall start demanding for tax cuts and further design ways to evade the tax payments.
“Considering that the top marginal tax rate for the wealthiest Americans today is 35 percent, that figure seems astounding. But it's true that in the 1950s, the top marginal tax rates were over 90 percent” (Farley). Many may think, how does lower taxes on the highest income earners have an effect on them. Simple, less funding of programs that enrich the quality of one’s life. When the government does not receive the needed funding spending cuts must be made. Unfortunately, these spending cuts are more often than not are on government programs that help those who are
Another huge problem is the way that the tax code works. As Warren Buffett explains, the “tax code is tilted towards the rich and away from the middle class.” It’s actually upside-down those with more pay fewer taxes, than people with less. Though the top rate for wage-based income is 39.6%, the rate for income from investments (capital gains) is only 20%. That means wealthy people pay a lower tax rate than the rest of us. Examples include Buffett, whose tax rate is about 17%, while
With rapidly rising income inequality in the United States, would the redistribution of taxes benefit the US economy? It is one of the greatest political questions that deserves to be debated since the US economy suffers with a huge deficit that topped $20 trillion this year and is expected to grow by another 10 trillion over the next decade. In Julie Borowski’s blog post,”Why Shouldn’t the Rich Pay More in Taxes,” she reveals the value of equal opportunity as she proves her argument of why the rich should not bare a larger burden on the national debt crisis through her use of ethos, logos, cynical diction and rhetorical questions. Before we analyze her views, it is important to note that our federal income taxes pay for social security
While those making near the median income of $51,939 per year fall into the 25% tax bracket, taxpayers making over $413,200 per year pay 39.6% of their income to the government. Though heavily taxing the wealthy may seem to offer a solution to the ongoing economic woes, it has quite the opposite effect. For instance, many of the citizens who have a yearly income of over $413,200 own small and medium-sized businesses, which comprise a crucial part of our nation's economy. Because these private business owners are burdened by such high tax rates, they often have to pay their employees less and refrain from creating new jobs. Even more importantly, progressive taxation undermines the very fundamentals upon which the United States of America was founded by attempting to redistribute wealth through socialism. Our current tax system effectively strips individuals of their incentive to pursue entrepreneurship and positive economic development. In his first inaugural address, Thomas Jefferson stated, “A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” I am utterly disgusted at the way our government has blatantly disregarded the tenets of
The United States Federal Government currently functions on a “progressive tax system”. A progressive tax system is based on ability to pay and therefor requires members of higher socioeconomic standing to pay higher federal income tax rates. The idea is that wealthy people, whether they are wealthy as a product of their own intelligence and labor or wealthy by inheritance, can afford to pay higher tax rates and still maintain a quality of life well beyond what is considered livable or even standard. This procedure understandably creates a lot of upset in the upper-class community. According to the IRS, in 2007, more that 44% of income tax revenues came from the top 5% of earners and more than 50% came from the top 10%. In the same year, the 400 wealthiest Americans, bringing in an average adjusted gross income of $345 million paid an average federal income tax rate of 17%, whereas the average tax payer during the same time period paid only 9.3% of their gross income to the federal taxes. In 2010, about 45% of all
For some time now, the United States economy has been trending in the direction of social injustice. Income inequality is ever expanding, and the primary reason is that those people at the very top of the income distribution are accumulating wealth at rates never seen before. The rich are getting richer to the extent that they are driving a massive wedge between socio-economic classes within the United States, and the impacts are far-reaching. Combating this inequality begins with an examination of the economic policies currently in place. Federal tax policy is an ideal place to start, considering the prominent role it plays in determining the distribution of wealth.
I don't believe that the wealthiest Americans have a "moral" obligation to pay higher taxes. These individuals have earned where they are today to be consider the wealthiest Americans. They may be more successful in the manner of making money, but they shouldn't be penalized for it. While education is extremely important to young children, the statement "It takes a refined theory to say to billionaires that it's easier to take three weeks of school away from kids in Los Angeles than it is to take 3% away from people who make hundreds of millions of dollars a year," said Brown in an interview with The Financial Times was appalling to me. I felt as though this very statement was to guilt citizens into believing if the rich don't pay higher taxes,
Our current tax system is outrageously unjust. Most working people pay too much in taxes compared to corporations, multi-millionaires, and billionaires. Many of our biggest and most profitable corporations pay little or no tax. Most investment income is taxed at less than the rate of workers. Income disparities have become so pronounced that America's top 10 percent now averages nearly nine times as much income as the bottom 90 percent. Wages in the United States have been stagnating for more than three decades. Typical American workers and the nation's lowest wage workers have seen little or no growth in their real weekly wages. Since the mid-1980’s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest
Currently the highest earners in our nation pay a rate of 39.6%. This percentage was used in a simulation by Brookings Institute in conjunction with the Tax Policy Center to test whether or not raising taxes on the rich would work?
Taxing the wealthy at a higher rate is counterintuitive. The wealthy create jobs! “companies need investment in order to open for business and hire people, we then can ask where investment comes from. It comes from all of us who save and invest, but the rich, by virtue of being rich, have the most to invest. Investment is what creates jobs, rich people can claim the vast majority of investable wealth in this country, and because they can it’s another tautology to say that their savings and investment create the vast majority of jobs”(Forbes). So obviously, it makes sense to go ahead and tax the mess out of the people who have the most to invest right? They invest in
One of the obvious reasons to raise the taxes of the rich would be because they simply earn more. One example is if two people started the year off with fifty thousand but then let us say one had a rich family member that died and they had received millions through a will, then say they received a gift of one billion by the end of the year they pay the same taxes even though one of they are now a billionaire (Cohen). The reason is that the government does not tax on gifts or wills so then they would not have to pay more taxes if they received a gift that had consisted of a large sum of cash (Cohen). Now there is a large chunk of change out of circulation and now the middle/lower
When it comes to income taxes, the focus is usually on jobs, personal investments, and savings. The debate on who should bear the greater burden when it comes to income taxes is timeless. If all types of tax are aimed at developing the economy, it should be everyone’s equal responsibility to engage in taxation regardless of one’s economic class. Both parties involved proclaim the legitimacy of their arguments. The articles under discussion are representative of this debate. On one side of the debate, there are those who feel that the rich should pay more taxes. Then there are those who feel that the rich should not be punished by shouldering the burden of taxation (Benson and White 1). From an economic theorist’s point of view, both articles articulate valid arguments. However, this does not nullify the significance of the prevailing economic situation. The above debate can be based on various economic contexts.