1) Introduction of Economic Issue
In my point of view, I completely disagree with the notion that the rich should pay more taxes. I strongly oppose over payment of taxes from the rich. In my point of view, the rich should be thanked for their great contribution to the economy of a nation rather than forcing them to pay more taxes than an ordinary citizen. It would be totally unfair to them to be victimized just because they are rich in the society (Olken, & Singhal, 2009). There are a number of reasons why I oppose this notion; one thing that is for sure to everyone, the efforts of an individual is what defines the social status of an individual.
The rich have their right to enjoy whatever they have worked for without victimization from the government. The ever developing proportion of public services that ordinary citizens who earn a medium wage from the public service commission’s pay comes from the rich men after their agitated concupiscent efforts and the absolute prosperity that construct dynamism in the globalized market. In addition, I would like to point out that these same rich people in the society and the very few in a complete economic field, are the perfect target to charity donations and fundraising projects.
Their contribution to the society counts a lot in the development of international recognition. I further provide a live evidence to support my view on the same. In most cases, any fundraising project being conducted by the community, the rich people are the main chief guest to contribute on the same. The community solely relies on the funds the rich contribute. They are the breadwinners to most families (Olken, & Singhal, 2009). The relationship is quite simple, the rich invest their money on luxuries and in return the noble citizens find their source of living.
The governments should consider their action of over taxing the rich by viewing the consequences on the same. They should be thanked by both the government and citizens for their great contribution in the community and increment in global market. According to my personal view, most people resent the rich for continually increasing their wealth than the middle waged classes. The increasing gap between these two classes’ of people intensifies the rivalry. The rich are always above the average compared to the middle class individuals. The reason behind this is their high level in business skills, great energy, a lot of confidence, and risk taking strategies just in the name of making money.
Despite all their devotion in making money, the money that will be contributed to the charity donations and fundraising projects in the community, they are being threatened to be over taxed by the government (Olken, & Singhal, 2009). This will kill their spirit of commitment and hard work. If over taxing they will solve the economic and social problems citizens face, then why would they work for more wealth? Therefore in my point of view, it becomes easy to observe how the rich people amass greater fortunes through globalized economic strategy.
The act of over-taxing the rich will reduce their intersecting circle in economic environment that they own. According to the American economist A Laffer, he argued that by reducing their tax rates, it may contribute to increase in global economic growth. A decrease in tax rate to the wealthy individuals, produce a corresponding increase in the level of global economy.
2) Analysis of Current Specific Impacts
According to the research that was conducted, if the wealth pays more taxes there would be negative and positive impact on this issue in our current global. Majority are saying that the rich are more fortunate and are born with high IQ scores. However they do not consider that the rich are the backbone of every country’s economic (Costa-i-Font, De-Albuquerque, & Doucouliagos, 2011). The research comes into conclusion after discovering that the rich do ordinary thing in an extra ordinary way. They are working hard to make moves to reach where they are by pass through the hard times in their enterprises.
According to the research it is therefore wrong to punish people because of their hard work. However on the current issue which is taxing the wealth more there is rise in economy much further up. It is noted that skilled tax planning has enable companies to report higher profits. According to the government tax reforming should not fade away until the government reaches in it objectives. Much of this enormous pool of money is in tax docks, where the norm is single-digit tax rates (Costa-i-Font, De-Albuquerque, & Doucouliagos, 2011). The higher reported profits translated into higher stock prices. This revenue that is gained after taxation pays dividends to shareholders as well as acquiring other United States companies.
In United States, the tax revenues being on pace to reach the set standard is of significant importance hence the country’s economy will be moved further up and the government will be able to tackle its expenses without further ado. It is expected that federal tax revenues will exceed $3 trillion which will be a history in U.S. This revenue are used to improve and maintenance of infrastructures. However there is transparency in expenditure where Department of Interior (DOI) gives transparency in revenue. The body handled leases held by the federal government.
Federal revenues mostly go toward government programs, therefore underestimation by taxpayers on the amount of taxes spent on other crucial elements of the federal government’s budget should be minimal since the government have a body that practice transparency on expenditure of revenue. According to the research it shows that the federal government spends its revenue to foreign aid to countries where aid is needed due to natural calamities. The revenue also goes to funding for the corporation for public broadcasting this is about 5% of the revenue this help the media such as television and radio stations in United States.
In return the government workers earn pensions and benefits; here the federal government uses 3.5 % to pay its workers. The revenue also helps in food and housing assistance to the poor this is to practice equalization in the country (Costa-i-Font, De-Albuquerque, & Doucouliagos, 2011). There is other mandatory spending which also includes government programs. The Congress creates a program and decides how much it should receive. Therefore taxation is a paramount in the each and every government since its role is paramount too.
Mandatory spending makes up about two-thirds of the total federal revenue, programs includes social security, veterans’ benefits, medical care and food stamp. Discretionary spending is another portion where revenue is directed, it is referred to quota of the budget that congress approves via annual appropriations process. These are programs such as defense, foreign aid, education and agriculture among others. Therefore federal government depends on revenues from taxation which plays an essential role to its programs.
3) Observations, Views or Concerns Relating To Taxation
There is no justice taxing more on the wealthy people in the society for the bare reason they are rich. Being rich is as a result of personal efforts and hard work. Even if the wealth is heredity, someone worked hard for it (Kishtainy, & Abbot, 2013). Charging the wealthy more is a discouragement to the other citizens not to work hard. We should remember that the rich drive our economy by providing job opportunity to the majority of the middle class. Charging the rich more is purely unfair treatment because the country is made up of everybody. It not only discourages hard work but also result to the people hiding the value of their wealth.
There are many observable negative effects associated with this form of taxation where people pay more tax because they are wealth. These impacts range from hiding their wealth in foreign countries to being reluctant in their work for the fear that the more wealth they accumulate, the higher the tax they will pay. This not only reduces the level of the national income but also the level of economic growth and unemployment.
Many wealthy people or over the world, as well as in the United States of America, are every day investing and banking their wealth in other countries where the taxation are a little low (Kishtainy, & Abbot, 2013). This has great impact on the country’s wealth, growth and development as well as the employment level. When the citizens invest their wealth in other countries in secrecy, the nation of their origin suffers.
For example, when American investors invest in the developing countries in secrecy because the taxation is low and therefore making maximum profit, the American economy suffers in two ways. First, the government will not gain any income from the investment because they are done in secrecy. Secondly, the American society suffers from unemployment since the possible employment has been diverted to another country. This has and is still contributing to the poor economic performance which is characterized by high level of unemployment in the states.
Unequal taxation has caused laziness and premature satisfaction in achieving economic and financial success. Each citizen has a right to maximum opportunity to peruse their goal and dreams. The government on the other hand should protect these individuals and not discourage them like it does in taxing them more. The citizens should be encouraged and this can be done through equal taxation and not over taxation (Kishtainy, & Abbot, 2013). The government should seek to generate more income and it should therefore encourage its citizen to accumulate more wealth by taxing less to motivate them. This will not only increase its income through increased number of taxable employees and increase the employment rate.
Taxing the wealthy more is a form of communism that does not want to see people prosper. The harder the people work the government takes more. This is discouraging and it is observable in most countries as less people want to get more wealth for the fear of the high tax imposed on them. For example, in America, only three percent have a doctorate degree because the higher the education levels the high the salary and taxation likewise.
The wealth pays up to forty percent of the income; this is pure robbery of someone’s hard earned income. This is penalizing the rich through communalism in which the government calls fairness. Fairness is when an individual’s hard work is appreciated and they should, in fact, pay less to encourage them work harder and make the economy grow more.The government has to intervene to solve this problem and ensure everybody is rightly and fairly treated in terms taxation (Kishtainy, & Abbot, 2013). The government should revisit it taxation policy and rewrite it in a way that it considers fairness and public opinion and feelings.
The taxation policy applied in the United States as discussed above oppresses the rich by taking from them what they have to give to the poor. This is a form of communism aimed at the rich. The government should focus on the scale of benefit that would accrue from treating the wealthy fairly. First, the government will benefit by the increased employment rates that comes with low taxation. When the wealthy are taxed less, they will have trust on the government and will therefore embark on investing within the country. More investment will increase job opportunities which will increase the national disposable income and as a result the government can fetch more revenue.
The reduction or fair and equal taxation policy will encourage the citizens to work hard and therefore accrue more wealth, generate more income and the taxation from various sectors will increase the national revenue (Kishtainy, & Abbot, 2013). It will also motivate the citizens to work hard and be more successful because the policy of ‘punishing’ the successful in the society will be eliminated. People will have trust in the taxation policy and therefore they will invest in the country thus improving the economic performance.
The taxation policy in the United States of America is a vehicle that oppresses the wealthy for their hard work. In so doing it discourages millions of capable individuals from achieving their dreams through exploiting their full potential for the disadvantages related to the same. The American government should therefore embrace a system that treats all taxable individual equally and fairly if it desires to achieve economic success and solve similar related problems such as unemployment.
Costa-i-Font, J., De-Albuquerque, F., & Doucouliagos, C. (2011). How significant are fiscal interactions in federations?: A meta-regression analysis. Munich: Univ., Center for Economic Studies.
European Commission, & Statistical Office of the European Communities (2006). Structures of the taxation systems in the European Union: Data 1995-2004. Luxembourg: Office for Official Publications of the European Communities.
Kishtainy, N., & Abbot, G. (2013). The economics book. New York [N.Y.: DK Pub.
Olken, B. A., Singhal, M., & National Bureau of Economic Research. (2009). Informal taxation. Cambridge, Mass: National Bureau of Economic Research