We have hit a conundrum in the United States as far as taxation goes. The government is split on whether to tax the rich more or not. The dual arguments are that with tax breaks, the rich will flourish their money into the economy, encouraging investments. As opposed to increasing taxes on the rich, putting more money back into the system. Either way, you look at this, both sides hold some solid points. But the overall goal should be the same, either taxing the rich more or less should be beneficial to the economy.
Why Higher Taxes On The Rich Makes Sense
Having a higher tax rate on the country’s wealthy makes for a more even playing field. There are huge income gaps in most developing countries around the world. Countries like India and China have a strong upper-class, but a huge amount of poverty.
This type of wealth gap is clearly unhealthy for the overall
If the majority of the population is poor, then GDP will suffer due to the lack of economic activity in those regions. India and China have populations in the billions; bringing jobs for all those people is difficult.
It’s easy for Americans to overlook the difficulties facing India and China since we’re no longer a developing country. In American history, the rich once dominated while the poor suffered.
The middle class virtually didn’t exist and the income gap was huge. After the Civil War, business started expanding rapidly and the full throttle of American capitalism had begun. Businessmen like Rockafeller, Carnegie, and JP Morgan, cornered the entirety of their markets making them a fortune in the process.
Theodore Roosevelt’s policies would eventually restrict monopolies, limiting the power that the super rich had over America. History tells us that the super-rich has a tendency of abusing their power.
Such abuse to the level of Rockafeller and Morgan is less likely to happen today. But, the super rich still cheat the system; their massive wealth gives them the leverage to do as they please. This is why it may be necessary to keep them in check so that they don’t do whatever they want.
Why Taxing The Rich Isn’t the Answer
It is true that taxing the rich fairly is a good way to keep stability between economic classes in society. Making sure that they pay their due diligence and restricting their ability to enforce immoral business regulations is undoubtedly important. This way of thinking, however, is a dead end.
You can’t solve all of America’s economic problems by simply taxing the rich. Today, there is a growing movement towards the equalization of medical coverage and the tuition of college. These socialist ideals had first arisen in the United States during Franklin Roosevelt’s administration in the 1930s as part of the new deal.
The new deal’s focus was to stimulate an economy in the depths of the great depression through the creation of jobs, and welfare programs like social security.
The new deal was initially to include universal health coverage, but due to time constraints, FDR scrapped the idea. America had left behind any idea of universal healthcare upon the start of World War 2.
Today, leftist politicians in the United States are in favor of the socialist ideas of FDR. Another idea is free college, which has been fairly controversial in recent years.
For the United States to start implementing these programs, it won’t just be taxing the rich. Every social class will pay in to provide a stable priceless healthcare system and tuition for college. Democrats like Alexandra Cortez, have propositions that promise to tax the rich and pay for everything through wealthy Americans pockets.
The wealthy will not be the only ones paying into these new plans. The middle class, the rich, and the super-rich will all pay their fair share.
How Will Americans React To Change?
The way that America will react to the implementation of socialist programs into their lives will fluctuate. Some people who have spent years saving up to pay for their kid’s school will probably be angry to now have to pay for another’s. Others who have been less fortunate in life financially might grab the opportunity with both hands.
Political and social concerns may make Americans unconformable to change. In all of American history, people have been paying for college and medical care from their pockets. Americans are afraid of how socialist programs will affect their incomes, along with how the economy will deal with the change.
What Should Be Done?
With all of this taken into consideration, should the rich be taxed more? The complications of this topic revolve around two main ethical concerns.
The first argument is that the rich should be taxed more since their higher incomes give them the luxury to do so. The other argument is that the rich shouldn’t be taxed more since they drive our economy, making it harder for them to do business in the United States.
Promoting higher taxes on the rich can be perceived as punishment towards their success. Numerous studies have been done by economists indicating that the rich should be taxed more.
If you take politics and social issues out of the equation, then unequivocally yes, rich people should be taxed more. Taxing them at a fairer rate will most likely not hinder their business operations or any investments they plan to make.
But we must still cross the line at some point. The rich cannot pay for every social and economic issue that this country has alone. This process requires teamwork from virtually every person who puts money into the system. It’s possible to work out socialist programs that can transform the medical and higher education systems in the United States.
Franklin Roosevelt had made the first step with his new deal which even then was unpopular with Republicans and other Democrats. The American people, however, must have not had a problem with it since they elected Roosevelt four times in a row.
Whether you support a higher tax on the rich or not it’s important to understand both the negatives and positives. A higher tax on the rich doesn’t have to mean that we are penalizing them for their success in society.
Nor does it have to take away from their beneficial influence to the economy. Rich people shouldn’t be demonized but should be viewed as valuable contributors to an ever-growing economy. Stronger support for a more equal social class system in America is necessary.
Without an equal social class, there will never be stability. History tells us it’s fine to challenge society’s controversial ideas intellectually, without fear. Taxing the rich economically makes sense, but social concerns are always something to keep in mind in a developed nation like the U.S.