Saturday, December 12, 2009
How Many Ways Can You Tax the Rich?
Democrats are looking at different strategies on how to tax rich to pay off the most of the deficit. According to Mr. Obama’s campaign, taxes should be raised on everyone whose income exceeds $200,000. IRS reported that they collected $610 billion in tax revenues from people who made more than $200,000. It is 44 percent of total tax revenue. However, some experts say that it will be not enough, and less rich people should also pay more in taxes. There was a proposition to raise marginal rate to about 55 percent in high-tax states. This level was not seen since the pre-Reagan era. On the other hand, this tax strategy can backfire by offering their rivals a political opening ahead of next year’s midterm elections.
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7 comments:
If the rich get taxed too much, there would not be any rich people left to tax. High taxes are a disincentive for wealth creation. With high taxes, there will be less incentive to work hard and be productive. Also, the rich will most likely leave the country, to tax friendly jurisdictions like Switzerland. A consumption tax makes more sense, as it still encourages wealth creation. With such a tax, people will be given an incentive to save and invest.
I agree with David I think people who are working hard to earn big should not be taxed to an extreme level. it can be unfair to people who want to be a U.S. citizen are coming to the U.S. with huge money and get taxed on it. There are a lot of people Americans who i know personally have given up their citizenship because they are afraid they will be taxed a lot on their income and they have moved to Dubai.
I agree with both David and Bushra on the high tax level for the rich and how it can discourage many. Democrats need to be careful in this case because one wrong move could really harm their chances in the re-election in 2012. We simply cannot just keep these high taxes "saturating" the rich.
I agree with all of the above. Although the rich should have higher taxes, it should not be extreme. Everyone is entitled to a tax in the United States. Although taxing the rich more can help with the deficit, it will harm the next midterm elections. I do not think that they should be taxed to an extreme, that is simply unfair.
Going back to Reagan's era, to increase productivity in general, it is more wise to tax the middle income the highest to encourage them to work harder to be taxed less. The government can not rely solely on the rich to provide the highest revenues for the government, eventually there will be no incentive for the rich to earn the high incomes that they do. There are other ways to cut the deficit instead of just raising taxes. Government can cut government spending, which may seem hard at this point, but is the bailout really that necessary? Businesses should fail in order to create more efficiency within the corporation.
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