Many Republican led states are looking toward a new
tax reform. They want to lessen income tax and raise consumption tax. However,
doing so would "hit the poor and middle class
harder than the rich." Kansas and North Carolina previously
attempted this and the results weren’t what were expected. Both states
experienced huge budget shortfalls. Still, the Keystone Research Center experts
believe lessening the tax burden is the way to remedy the budget deficits. They
believe cutting income tax will encourage the rich to spend and invest more
into the economy, providing "more jobs and
economic benefits for everyone."
Is a less progressive tax system the way to go?
7 comments:
I think that the states are vastly overly-optimistic about the revenue possibilities from consumption taxes. I favor these in some cases because I think they are fairer and less economically distorting. However, there is a huge opportunity cost in lowering the top marginal rates on the highest earners who likely would not, magically, turn it into more jobs.
I think that a more progressive tax system would be a better solution. While a less progressive tax may remedy budget deficits and provide more jobs, I think a more progressive tax system would help to remedy a greater issue: income inequality.
A less progressive tax may however have a trickle down effect which could be favorable for the entire economy. This would hit two targets with one arrow; it would help with the deficit and income inequality
I agree with Emily that a progressive tax system would be a better solution to this issue. By taxing the middle and lower classes more might discourage consumer consumption in these social classes. The middle and lower classes have lower incomes already and taxing the majority of the population of the country might negatively change their spending habits since they would have less money to use. Also, a less progressive tax system may cause a bigger income inequality gap because the rich would be getting taxed less and the other two classes are being taxed more.
I think that the upper class should be taxed more, similar to various colleges have already said. The lower class already suffers because of a lack of funds to support all of their desires. There are many social consequences for these people being in the lower class too so to add on more burden is unfair. For the middle class, which is dwindling because of flexibility of the job market and a lack of job security, they are now faced with more things to worry about. Especially if they are loosing their jobs and have to worry about cutting their pennies which are being stripped away from them from these taxes. The upper class already have more funds so a progressive tax would affect their mind more than their pockets and hopefully they would not change too much causing that trickle down affect mentioned above.
This is a topic that is always widely debated. You can go either way on this but i think a progressive tax brings about more equality, while still lessening the deficit. I don't necessary believe that there needs to be a more progressive system then is already implemented. What I do think however, is that a higher tax on consumption would just be an overall bad move because this has a much greater effect on lower income families. The bottom percentage of income families to not need to have any more of their incomes spent toward taxes.
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