Monday, October 3, 2011

Taxation and class war

This is a well written article, however, Taxing the rich a bit less could also have it's benefits. For example, one has not thought about the benefits of taxing more prosperous Americans at lower rates than the average person? For example, when wealthier Americans are paying 15%, they can spend more, and more spending means more investment. More investment would create more employment and more income for people and that could lead to economic growth. The wealthier citizens could also contribute a higher proportion to charities, hospitals, street shelters and educational institutions and many other institutions the underclass needs but for which the government doesn't pay.

A higher taxx rate could even discourage people to work harder as they feel they are earning less. And if these wealthy individuals are seen giving their fair share, then there will be civil peace as well because there will be a lesser probability of an angry underclass, as for example has happened in many European countries recently.

Plus, the other issue is perceived fairness. If more prosperous Americans are seen to be contributing their fair share, then there is less chance that they and their property will be attacked, in civil unrest, by an angry underclass, as was the case in 1917 in St. Petersburg, or as happened in several European nations in the last year.

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5 comments:

  1. SaarOctober 6, 2011 at 2:02 PM

    All this is true.
    But the thing in America is that these wealthy individuals do not have much investment spending. They use it in unproductive things which harms society. They use it to buy luxury products which in the end does not benefit the economy as much.

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  2. AnonymousOctober 6, 2011 at 7:35 PM

    I totally agree I was going to comment that by taxing the rich less they are not going to spend their money on charities or on something for the society.They will be spending it on themselves.

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  3. Sijia HeOctober 6, 2011 at 7:59 PM

    The measurement of enhancing tax of rich would be important. A big tax gap will make rich people angry, but I don't think that a small change in tax rate will make a RICH people buy less stuff, in total making a much lower spending. Tax rate may mean a lot to a middle class family and not to mention the poors. For the rich who used to extraordinary life, some tax change would not make them turn to a saving life.
    And also, as comments above, I agree that if taxing less, the rich will not use the money on charity.

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  4. HarshaOctober 8, 2011 at 8:51 PM

    The article sounds interesting and idealistic. However, in a capitalistic society such as the US, these kind of policies are bound to fail. If this kind of a thought were to be successful, socialism would crush capitalism -- which certainly does not seem to be true in today's world. Human beings are greedy by nature, and I would find it hard to fool myself saying extra money with the rich will flow in to charity!

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  5. SaarOctober 10, 2011 at 1:26 AM

    Socialism crushing capitalism is too far-fetched. You just engaged in historicism. Please refrain from doing that.

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