We Should Tax the Rich More - Essay Sample

General Purpose: To interrogate whether the rich should be taxed more, explore reasons, and make a concrete decision based on profound reasoning.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Specific Objective:I will attempt to prove that the rich should not be taxed more as the decision would lead to severe impacts such as reduced economic growth, and increase in the tax avoidance tricks and mechanisms among the rich.

Central Idea:Although there exist disparities in the income distribution and resource ownership, alternative measures other than taxing the rich far much more, should be utilized, prevent the country from deteriorating economic-wise.

Introduction

The United States of America is currently facing the challenge of inequality caused by the unfair distribution of wealth among the citizens (Vitelli, 2019).

Records by the financial institutions and other organizational files suggest that 1% of the rich in the U.S controls about 40% of the nation's wealth. “The Federal Reserve estimates that the top 1 percent of Americans hold slightly more wealth than entire the bottom 90 percent, and their share has been rising over time,” (Wessel, 2020)

Besides, the three wealthiest people out of the approximated 400 million, owns a value of wealth that is equal to that owned by the remaining bottom half of the citizens. In a nutshell, despite having 49 million wealthy persons, the report indicated that 43 million US citizenry are poor and homeless.

My interest on this topic was promoted after understanding the motives for most Democrat candidates, because their presidential candidates usually believe that, taxing the rich more, is the only solution for ensuring that resources are shared equally among individuals.

Today, I would aim to prove to you how increasing the taxes on rich can be harmful, and how can using flat rates during taxation is beneficial in various parameters.

Discussion

Impacts of Using the Higher Tax Rates for the Rich

Typically, it is imperatively clear that federal government would utilize the statistical figures obtained by researchers, to list the rich and the poor in the U.S. However, these approximations are prone to errors, and numerous individuals may decide to hide their wealth, upon realizing of the calls for increasing taxes on high-income earners (Vitelli, 2019). The controversial debate on whether to raise taxes for the wealthy or not have introduced and increased ways of tax avoidance (Frank, 2019.

Chang (2019) stipulated that most rich people hide their money in offshore accounts; hence it is challenging to target them for taxes for use in running the economy.

Moreover, focusing on the rich only, for obtaining taxes, would motivate the wealth to stop their businesses, or manage them in other nations with comparatively lower tax rates (Chang, 2019).

Rich people are less in number; hence the taxes earned from their income cannot be enough to sustain the country's operations, and still manage to control the high rates of poverty (Wessel, 2020).

The proposed 75% taxation on the rich would thus apply for only 1% of the Americans, who perhaps earn more than $500,000 yearly (Frank, 2019).

I believe that if the rich are taxed more, then the poverty rates and the homeless might increase in number.

Benefits of Using the Flat Tax System

A flat-rate system of taxation ensures that everyone is taxed at the same rate without consideration of one's income or wealth (Amadeo, 2010). Most importantly, thus tax system usually provides a list of tax exempts-those whose income is not liable to taxation, such as very low-income earners, or families that have high dependency ration (Amadeo, 2010).

It would be more essential to collect taxes from about 150 million taxpayers in the U.S than to collect tax from 49 million wealthy individuals with income above $1 million. Chang (2019) suggested that the federal had to tax the rich at the proposed 3.5% increased rate in 2019, then the USA collected a total of $3.5 trillion revenue. Analysts state that the figure would have doubled if a flat rate system was used for the same fiscal year (Vitelli, 2019).

Conventionally, the same rates would still mean that the rich pay more because they will have more income. Imposing a 10% tax rate on someone with a salary of $50,000, and another with $1 million would yield a different amount of revenues, but none will feel the pinch, as the system promotes fairness (Young et al., 2016).

You can see that Progressive tax rate system used by the federal government is unfair and slows down the rate of economic recovery, especially when more revenue is needed to rejuvenate most sectors, for the betterment of everyone, including the poor.

Solutions

From the research findings highlighted above, I would encourage that a flat tax rate system is used because, it would allow families earning an average of below %36,000, and have four or more dependents to be called tax-exempts Chang, 2019.

The major problem of the progressive tax system, where tax rates are calculated based on earnings is that significant population are favoured, but the rates of economic growth are hampered significantly (Young et al., 2016). The rich should thus not be taxed more, because the flat rate system not only results to more federal revenue but is also considerate of the poor individuals with low incomes, which was the main issue for the demands of increasing tax rates among the poor (Wessel, 2020).

As you can confirm from these justifications, the few wealthy individuals in the U.S (about 1%), may decide to take tax avoidance measures, and the entire nation would thus suffer tremendously.

Conclusion

I hope you noticed that although, supporters of these arguments believe that, raising taxes on the rich is one way of promoting fairness, and balancing the ratios for income distribution, the effects of the progressive tax system might end up making these outlined situations worse.

Meanwhile, an alternative solution of using flat tax rates is as simple as it may seem, because everyone will be motivated to work earn more, thus remain with a large amount to spend. This method would raise the amount of annual federal revenue, which can then be used in leveraging the living standards of the poor and investing for more growth in the economy.

I would strongly urge that the proposals for taxing the rich more, are turned down because the effects would be more disastrous.

References

Amadeo, K. (2010, October 30). Why might a flat tax increase your tax bill? The Balance. https://www.thebalance.com/flat-tax-pros-cons-examples-compared-to-fair-tax-3306329

Chang, A. (2019, March 5). A better way to tax the rich. Vox. https://www.vox.com/videos/2019/3/5/18249732/wealth-tax-better-way-rich

Frank, R. (2019, October 15). Here's why this economist says the 'perfect' tax rate for the rich is 75%. CNBC. https://www.cnbc.com/2019/10/15/this-economist-says-the-perfect-tax-rate-for-the-rich-is-75percent.html

Vitelli, A. (2019, April 16). Should we raise taxes on the rich? theperspective.com/. https://www.theperspective.com/debates/businessandtechnology/raise-taxes-rich/

Wessel, D. (2020, February 14). Who are the rich, and how might we tax them more? Brookings. https://www.brookings.edu/policy2020/votervital/who-are-the-rich-and-how-might-we-tax-them-more/

Young, C., Varner, C., Lurie, I. Z., & Prisinzano, R. (2016). Millionaire migration and taxation of the elite: Evidence from administrative data. American Sociological Review, 81(3), 421-446. https://journals.sagepub.com/doi/abs/10.1177/0003122416639625