As the national debt increases everyday, there has been a significant increase in discussions about reforming the current tax laws. One of the proposed ideas is to add a wealth tax on top of the income tax that is currently used by the United States. Basically, how this wealth tax would work is that every household would list all of their possessions yearly on a document which will then be valued by the government. However, only those who have over $3 million worth of valued assets would be subject to this wealth tax. According to Ronald I. McKinnon, who is an economist at Stanford University, this wealth tax would only include the top 5% of the population is wealthy enough to own $3 million worth of items. The overall goal of this wealth tax is to close some of the loopholes that some wealthy citizens use to pay less taxes (ie. off-shore banking accounts, etc). This could turn out to be very beneficial for the economy if it is implemented properly.
I do not think it is acceptable for the United States to tax its' citizens who work hard enough to become millionaires and who make smart decisions when it comes to their investments, savings techniques, job opportunities, etc. These people understand how money works and It just doesn't seem fair to me that just because you are successful, your benefits and money are constantly taken away from you by the government. Higher taxes won't solve the problem of the United States government over-spending, only the government can change that. The government should focus on tightening their business regulations so these "loopholes" don't exist, not using them as an excuse to tax the successful. Wealth is a product of the capitalist system we live in. People work hard so they can reap the benefits and gain more income. Why take the reward away from people who work hard for it. People need to realize the top 5% can't support the other 95% no matter how much they are taxed.
ReplyDeleteIt is true that this tax would provide more funds for the federal government and help balance the budget by reducing the deficit. however I disagree with the move because of the fact that there are many cases in which an individual or a business is in the possession of millions of dollars worth of assets, but the investment spending and the money being put in the business are much greater than that of the assets.
ReplyDeleteThis plan could improve the economy by cutting the deficit but by how much? If this tax would only be implemented on the top 5 percent of our citizens the reduction of the deficit would be unnoticeable. With our current debt reach 16 trillion dollars a measly increase in taxes would do little to nothing to the overall defect. The logic is good but these people are the people aiding our economy the most. The top 5 percent make up a large majority of this nations consumption of goods thus aiding our country. I believe by taking away the rich's disposable income we are crippling the economy more. I believe implementing a "wealth tax" could be a very big mistake.
ReplyDeleteThis law leads the country down a very slippery slope. By taxing the wealthiest Americans, the government is discouraging domestic investment. Using classical fiscal theory, we know that by decreasing taxes, a rise in reinvestment occurs. Conversely, if taxes are raised, then the amount of reinvestment, and thus, domestic growth will be hindered. In terms of the national debt, instead of increasing taxes, lawmakers should focus on decreasing domestic spending to a maintainable level.
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