Why Do Taxes Decrease Income Inequality?

This week the reading by Frank in the Inequality Reader caught my attention. It talked about how the current tax system in the US is not conducive to helping society. It also mentions how an increase in taxes for the top earners would help not only the poor but also the rich. He also includes how the wealthy “have been made worse off, on balance, by recent tax cuts” (Frank 732). This reading made me think of the current GOP tax plan being signed and debated in congress.

Reagan wanted to stimulate the economy with large across the board tax cuts. The expansionary policies became known as “Reaganomics”, and some even considered them the most serious attempt to change the course of the U.S. economic policy of all the administration since the new deal.

This innovating plan Ronald Reagan had known as the Reagan Revolution, was aimed to give the American people strength. While in office he believed that people would do better if they were given freedom to compete for their own well being and improve their lifestyle. The remarkable thing he did was lower tax rates for all citizens and by doing this he increased revenue and allowed citizens to invest more into their country (staff, 2009). Tax cuts for the rich would enable them to spend and invest more. This was a great move to put America in the right direction, this helped the economy and created many new jobs. Reagan believed that a tax cut like this would ultimately generate even more revenue for the federal government, and that is exactly what happened (staff,

Inequality has torn down all respect that people have for each other socially in the United States. In the recent video we watched in class, Robert Reich addressed the current issues revolving around inequality in the U.S. and inequality will forever exist. Even though citizens are aware of inequality, the biggest factor pertaining to it is the subject of money. Inequality is a true problem when money and taxes are involved. For example, the documentary we watched exhibits scenes that display hints of unjust. There is a scene that describes the problem people having too much power and wealth, and the wealthy citizens are taxed substantially less than the working, and middle class. For instance, Mitt Romney was taxed somewhere around 13 percent,

There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries

Income inequality is one of the greatest problems facing the United States today. It is important for everyone to understand what this means and why this is a problem.

The “increasing concentration of wealth feeds on itself, becoming even more difficult to remedy” (Hiltzik). If the rich do not see the problem as to why they should pay more tax than the poor, then that is a huge problem that will need to be fixed before this stretches out to something even more serious than it already is. The rich and the poor need to work together and compromise on one thing, which is the amount of tax they should both

The vast wealth inequality in America (and the rest of the world) has been cited as a problem by Obama in many of his State Of The Union address, the Chairwoman of the Federal Reserve Janet Yellen, and many other liberal politicians and economists. Their talk about the problem of how the “1%” help perpetuate the wealth inequality has brought this issue to the forefront of society. In America, many citizens believe firmly in the idea of equality. The fact that some people have more money than they could ever spend, while others live in poverty on the streets conflicts with that value of equality. The most famous reaction to this rampant inequality was the Occupy Wall Street movement that started in 2011. Tens of thousands of people camped out next to Wall Street offices in New York and several other financial centers across the nation to protest the inequality between the 1% and the other 99%. This infamous movement gained media attention as the vocal protesters wanted to make it known that the wealth divide is unacceptable and politicians must rectify the situation. One important policy tool the United States has implemented to combat wealth inequality is a progressive tax. This means that people with more income are taxed at a higher rate than those with lower income. However this tax system has many loopholes in the United States, and the wealthiest individuals are routinely able to avoid being taxed at a higher rate by distributing their wealth in bank accounts

In the United States, there is a huge income disparity between the richest ten percent, and bottom ninety percent. The American tax, and political system favors the top 10% while neglecting the middle and working classes, suppressing living wages and exporting jobs overseas. A society where working 40 hours a week will not put food on the table. If the average hardworking American is working endless hours to try and support their families which is just slightly above the poverty line, while groups of 400 individuals, who are heads of the top 500 companies and financial institutions, who if even work, is less than 108 days a year, and are proud owners of 50% of U. S’s entire wealth. This is the reality of the United

In recent years, a growing gap between the wealthy and the middle class has grown, as the wealth of the world has increased significantly, yet only a minority of individuals get to enjoy it. Income inequality has been proven to be detrimental to not only the economy, but to the overall well-being of a nation as it leads to societal upset and can potentially prompt a decline in progression as a nation. Over time, income inequality has led to negative results in the United States, as well as many other nations including Greece. Consequently, the solution to prevent income inequality from deteriorating a nation and prevent economic upset is to ultimately tax those who are wealthier at a higher rate and put said money towards education and healthcare

From the Roman Empire to modern day America one issue has plighted all of history: income inequality. Income inequality is when there is a noticeable and evident gap in which income is distributed unevenly between the rich and the poor. We can particularly see income inequality playing a major role in the foundations of the French Revolution and we can see income inequality starting to transcend into becoming a real problem for America today, namely due to a practice of neoliberalism in the American economy. The solution to fixing the American economy would be to start a process of regulation of the economy and funding of social programs.

The crux of Ronald Reagan’s economic policy, the tax cuts, paved the road for success in the improvement of the economy. The promised effect of an increase in federal revenues and reduction in the cost of capital for America’s private sector necessitated the lowering of marginal tax rates that occurred in Ronald Reagan’s first term. The embodiment of these reductions and much of the credit for the economic rebound of the mid 1980s can be assigned to the Kemp-Roth Tax Cut Act of 1981. Reagan’s trickle down economics strategy held underpinnings in his belief that the nation’s wealthiest individuals and captains of industry had been disincentivized to earn more money from the oppressive tax rates of his predecessors. Accordingly, Kemp-Roth cut the top tax rate from 70% to 50% as recognition of the disproportionate financial capability of the nation’s top earners to reintroduce prosperity. Additionally, Kemp-Roth provided benefits to the affluent by increasing the estate tax exemption from $175,000 to $600,000 and by increasing deductions therein to further circumvent the re-taxation of hereditary wealth. While Reagan entrusted the top tax bracket with the responsibility of spending these funds as part of his plan to end the prolonged period of unemployment, Reagan also included provisions in the Kemp-Roth Tax Cut that affected all workers by removing

"No family gets rich from earning the minimum wage. In fact, the current minimum wage does not even lift a family out of poverty."

Honest-to-goodness, we make the ones who need our help and support pay greater taxes, and they use the money they could use to pay the rent of an over-expensive house or send their children to school. And where do the fortunate play in? They pay less when the have more money, and it’s not their fault, it’s the governments. That one percent of the american population that is wealthy has money to spare, while indigent people don’t. Blindly, the government think the poor deserve worse than the prosperous. Incorrect superstitions must be fixed, otherwise more and more Americans will be worse off than

The saying goes, the rich are getting richer while the poor are getting poorer. The government has always had several issues with which to contend, one of the major arguments has been, do the rich pay enough on taxes? This argument on rich paying enough in taxes has been around since the start of American history. On one side of the argument, people feel the current tax rates are at maximum levels, the “Buffet rule, which calls for a minimum tax rate of 30 percent on those who make more than $1 million a year is essentially already in effect” (Dubay 353). This argument clearly states the rich are currently paying more than enough in their fair share of taxes. The other side of the argument is the rich are not paying enough in taxes. In the bigger picture our country, schools, roads, and people are going down fast and hard. The government can choose to raise the federal tax rate on the rich but “high-earners also happen to be business owners, investors, and entrepreneurs” (Dubay 353). The government’s excuse saying high earners are an integral part of the economic opportunity in employing low and middle-class families is only an excuse for letting the rich keep their money and earn more. The government says the rich are paying their fair share of taxes, fair is paying on all taxable income, including capital interest to be taxed at a level commensurate with the rich and super-rich level.