Posted on | March 9, 2012 | Comments Off on Should the Wealthy Pay More Taxes?
Our president, later last year, unveiled a new method that he believes will help to increase the revenue to the treasury. The tax plan, designed to tax the wealthy to a greater extent than anyone else is vaunted by some as being the answer to the prayers of the Treasury Dept., while being denigrated by others as being little more than class warfare promoted by the government.
The core component of the plan and the hype that the government has created to promote it is the ideology that the revenues and the taxation should be given–(a quote from an old philosopher here) “from each according to his abilities to each according to his needs.”
The Obama administration denies most vigorously that they are engaged in the promotion of a class war by asking for a one and a half trillion dollar increase in taxation for the people who earn more than $200 K annually.
What our president and the administration do not state in their rhetoric, and what remains a sticking point for most economists and those with a modicum of common sense, is that while his conversations and Rose Garden speeches promote raising taxes for those who are “billionaires and millionaires” the actual tax plan raises taxes on any American who, by the sweat of their own brow, makes more than 200K per year. Further, it targets small business in a way that quite literally, discourages the average business person and prevents expansion, thereby actually cutting job growth.
This plan will effectively raise taxes on many physicians
Newly graduated students who are lucky may get into a great job, and about a quarter of the technology industry workers, many of whom are paying back outrageous college loans to begin with. Effectively, in order to make ends meet when a tax of this kind is proposed on their work, they will have no choice but to raise pricing in order to meet both the loans and the taxes.
Our administration also fails to note that the tax code of the United States is already nothing if not progressive when it comes to taxation of the people who make the most money. In fact, according to US News, the top one percent of US earners is paying almost forty percent of all of the income taxes and is also paying about 28 percent of all federal taxes combined. The top five percent of US wage earners according to government records and corporate payroll services are paying nearly 70 percent of all income taxes yet, the Obama administration believes that it is necessary to create a hike in taxes that would amount to three dollars in increased taxes for every one dollar in spending cuts made.
The simple truth is that the vast majority of people do not make $200K per year. In an election year, it looks and sounds great for the average Joe to think that the government is thinking of him first. Those who are making under $200 K are the vast majority and getting the votes of that group is certainly more important than getting the votes of the basic few who make more than that amount.
It certainly goes without saying that the Obama administration, as most others throughout history, is certainly not going to take time looking at wasteful spending habits such as million dollar secret service bills for multiple vacations for the first family. Those, in combination with the wide array of unnecessary spending, outrageous purchases, and duplicated agencies, and scaling back on governmental spending, would save trillions, but certainly not be as wildly popular as taxing the rich to get the poor vote.
There are ways that we can cut our spending quite dramatically, simply by turning our microscope inward toward our own government. There are ways to improve upon our own taxation codes and create simpler and more effective methods of taxing. The plain truth is that they aren’t going to garner the votes that the administration needs to continue to wreak havoc on our economy.
This guest post was written by indie journalist Patrica H. Hugley who regularly blogs about accounting and corporate payroll services.