The rich are getting richer and the poor are becoming poorer. This leads to, in an era of fiscal consolidation, impassioned discussions on a social, economic and political theme – increasing income taxes for the top one percent. Over the past decades, with both republican and democratic tax reforms all over the world (1), economic outlooks are uncertain. While some, such as the world-renowned technology pioneer Bill Gates, recommend higher levels of taxation, others, such as Ben Shapiro, who graduated summa cum laude from the University of California, Los Angeles and the cum laude from Harvard Law School, advise expansionary fiscal policies, meaning tax cuts. This short essay, will discuss and explore the concept of taxation and if “richer” citizens should pay more taxes than the middle and lower class.
While some believe that direct or income tax is the sole source of fiscal revenue a government generates through its inhabitants, other forms of taxation do exist and are considered to be more efficient than increasing taxation on the wealthier portion of society. As explored in Bachelor and Master economics degrees, there are numerous forms of indirect taxation on goods and services, such as the ad valorem (VAT) tax. Instead of directly taxing the so called ‘rich’ based on income this, alternative, form of taxation, would be applied on luxury goods and services. The effect special goods or services, also named “Veblen Goods”, has on the superior pecuniary class is alluded to in Thorstein Veblen’s “Theory of the Leisure Class”. He states that: “For this class also the incentive to diligence and thrift is not absent; but its action is so greatly qualified by the secondary demands of pecuniary emulation, that any inclination in this direction is practically overborne and any incentive to diligence tends to be of no effect. The most imperative of these secondary demands of emulation, as well as the one of widest scope, is the requirement of abstention from productive work […] [L]abour is felt to be debasing, and this tradition has never died out […] In order to gain and to hold the esteem of men it is not sufficient merely to possess wealth or power. The wealth or power must be put in evidence, for esteem is awarded only on evidence […]” (2) . As expensive goods and services are more than a “symbol of power” or a simple possession of wealth, such could and should be taxed more. Furthermore, this could help the government generate fiscal revenue, thus lowering overall, national debt. These economic means could be allocated towards improving the bonum commune communitatis (common good of the community) through enhanced public services, cheaper health-care and access to social security while experiencing frictional or cyclical unemployment.
A point often overlooked is that Germany, the ultimate Sozialstaat (welfare state), has an income tax rate that ranges from 0 to 45%, meaning it is of progressive nature. Furthermore, it ensures that no income tax is charged on the basic allowance, which is 8,345€ for unmarried persons and 16,708€ for married couples (3). One might consider that “rich people” should perhaps pay higher levels of income tax if it contributes to the functioning of state organs, social stability and the preservation of public services. One of the most compelling evidence is that Germany and other Nordic countries are known for their well-functioning infrastructure and relatively low levels of criminal activity, which, generally speaking, indicates a high standard of living. For this reason, it may be effective to uphold such standards with higher levels of income taxes for the wealthier section of society. However, other countries that do not effectively allocate tax revenue towards infrastructure, education and healthcare, all of them being components and possible factors of supply-side economic growth, should first propose or implement effective planning before levying higher marginal tax rates on the rich to compensate for mal-allocated fiscal revenue. Generally speaking, one point has to be made, it is not the “rich people’s” unwillingness to pay high-levels of taxes for the above-mentioned reasons, it is rather their skepticism towards how government entities allocate their resources.
Overall, it can be said that the prompt allowed for extensive interpretation and allowed to place the question, if rich people should pay more taxes, into different perspectives. On the one hand, other forms of taxation do exist, besides income tax, which according to Thorstein Veblen’s theory of the “Leisure Class” are proven to be effective when placed on luxury goods and services, the rich can afford with the motive of demonstrating status. On the other hand, when placing this issue in another context, income tax for the wealthier section of society should be taxed more if state resources are allocated towards infrastructure, education and public spaces. To conclude it can be said that, even though this highly debated socio-economic issue is gaining extreme momentum, at the end, it should be about maintaining balance and ultimately ensuring constant enhancement in everyone’s quality of coexisting in a stable community.
Bibliography
Interesting piece!
as is this:
https://fee.org/articles/40-the-rich-are-getting-richer-and-the-poor-are-getting-poorer/
The Tax laws are very clear; Taxation is for Corporations only.
I do not think the rich should pay more taxes as I believe the income tax should be what it was before 1913 - Zero.
I do like the idea of this luxury tax the essay touches on, I have heard this idea before. Similar to a consumption tax, individuals would pay taxes for what they consume, not purchase or earn.
#taxationistheft
I totally agree, I'm against progressive income taxation and personally think that a "luxury" good tax would be a more viable fiscal revenue generating method. My title should be seen as a prompt, I explore and criticise.
Zero taxes? How do propose we pay for schools, roads, police departments, etc.?
In the same way we pay for bread, cars, mobile phones, etc.
Voluntarily, and the prices are found via supply and demand 👍
That sounds great in theory, but who do you think is going to volunteer to pay for roads, schools, etc.? Those are all basic services that as a society, we expect (and in my opinion, we should expect them). There is no going backwards. Just to play that scenario out, lets say government no longer pays for roads. Interstate commerce goes into decline because I'm not going to volunteer to pay for roads in other areas. Well, then food and products can't get shipped. You would essentially kill businesses and business innovation (and thus most jobs in our modern world), and send us back to a time of mass poverty and disease. Most people are not going to volunteer to go back to rural agrarian communities just so they don't have to pay taxes. On the other hand, most people would lose their jobs, so then they wouldn't have to worry about paying taxes. So no taxes, yay!
As the author of this blog wrote, the biggest concern is not paying taxes, but what happens to that money. I think we all want responsible use of our taxes.
Everybody world pay according to his utilization of the roads. There is a demand for streets. A grocery store must ship goods from a wholesale company to its shop. So the owner of the grocery store needs a road for this. A road building company would build a road and afterwards the company gets a fee from each car and truck using this road. The fee can discriminate for weight (the more weight, the more damage to the road) or length of the car/ truck or number of passengers. With today‘s technology (GPS, DSRC) this can be done very efficiently and smoothly (e.g. German truck toll System).
Why should we need (corrupt) government officials to manage that? They just increase the price, lower the accountability of the road building company, distort the market. This socialist policy leads to a situation where modern highways are built in regions where they are not needed and a shortage of broad, modern highways in regions where they are needed —> socialist resource allocation problem. A central organ (government) simply cannot process all the information of millions of people and entities. Therefore we need the market mechanism.
Roy2016 brings up a good point - sales taxes are another way. I would be OK with increasing the sales tax to pay for basic infrastructure.
Remember, we have only had the income tax for 105 years, somehow our country did fine for 150 years prior to then.
We need to take a hard look at the Federal Reserve Act (repeal it) along with the the Income Tax Act - which was passed the same year (not by coincidence).
Taxes are necessary, just not should not be involuntarily and automatic.
Tariffs and taxes voted on by the people throughout the year for specific projects. That way the people have some say in where their hard-earned money goes.
I am only suggesting the income tax should be zero, that we should not have money automatically deducted from our paychecks without a choice in the matter.
To pay for the things you mention, the first thing would be to cut all the military spending. We also have the issue of paying the interest on our extraordinary national debt.
In theory I agree, but that's assuming an electorate that is educated on all issues and that will never happen. I am in no way qualified to have a say or opinion on tariffs of tea leaves from China, nor do I want to be. At some point we have to rely on people knowledgeable in fields other than our own.
As for cutting military spending - would the world be a better place if everyone did that? Absolutely. But it wouldn't work unless everyone did that, and that will never happen (unfortunately).
And don't even get me started on the debt.....sigh
Schools are paid for by property taxes, roads by gas tax, police are by local taxes. The federal income tax is unconstitutional and only punishes success and rewards failure.
Great post.
I love your when you state : "Generally speaking, one point has to be made, it is not the “rich people’s” unwillingness to pay high-levels of taxes for the above-mentioned reasons, it is rather their skepticism towards how government entities allocate their resources."
I think that is very true.
I am a very big fan of the Fair Tax - which basically gets rid of all taxes on income, VAT, corporate taxes, etc. and creates a consumption tax on everything. If you're rich and you buy a mansion or private jet, you pay more taxes on those purchases.
Neal Boortz wrote a book on it. It's a great read and pretty much addresses any concerns (taxing the poor, increased prices, etc.).
Hi @linus.lin,
A fascinating topic for a post and I just picked it up when going through my feed. We need more quality material like this on Steemit.
It is one of the great questions of public policy, and one that economists typically deflect. So a brilliant topic to bring up!
I found this academic paper to be very useful in informing my opinion:
The online abstract is available here: http://openaccess.city.ac.uk/18086
and complete paper in .pdf: http://openaccess.city.ac.uk/18086/1/FIC%20FINAL%20PAPER%20JULY%202017.pdf
I would have to agree with their conclusion and say yes....
Apart from this- I was in a waiting room the other day and got chatting to a person sitting next to me about AI. He recommended that I read "The Fourth Education Revolution: Will Artificial Intelligence liberate or infantilise humanity?" by Anthony Seldon.
From the way, he talked about the subject matter and the book I have ordered a copy already!
I remembered your last post which included this subject matter and thought you might be interested to hear about it!
I look forward to reading more from yourself shortly....
Regards,
@shenobie
I totally agree with you taxation. Upvoted and resteemed
Yes , I agree .... coz if rich people will pay more taxes .... the cost of products that people need for their daily use will not be raised and thus it will help poor people to live their lives
Let’s not any of us pay taxes :) so much work figuring them out . Oh and let’s not forget our hard earned money just going for ????????? Just for the record I pay my taxes but I hate it every step of the way
Nice
Visit my blog
supar post pls votes me
No, I don't agree with that. rich and poor people must pay the same amount of money. becouse there is no difrent between them. jut riche people use their mind and poor people use their power and i think it's not good reason to pay difrent taxes.
tax is vari bad you are rit
I feel it Should be like that , like the super rich should pay , so that maybe the poor or the middle class doesn't have to pay that high amount.
And most of the time , in some countries there are some liniancy towards the poorest of the poor , but the others even if they are just living by or even have debts sometimes and are really struggling to pass by , when the rich becomes richer and richest. Which I personally feel really bad , I feel there should be equality somehow !!
And since the rich have a lot , maybe they can pay more , so that the poor and middle doesn't struggle for their life.
I'm really talking about the billionaire's or such.
germany also has some of the lowes paid jobs as well ...
define rich
define "more" ... its an old question and a recurring topic
rich people will tell you they already do, and they do, in sheer numbers
where i live basically the percentage depends on your category of income, if you have minimum wage you pay about 30% (i think) if you have a normal wage that goes over to the 40% range, now if you have a small business, ... hairdresser, baker, butcher, gardening, laying driveways, putting up fences, independent as they say you basically start earning for yourself in august (yea, i know but it is like that) all the rest goes to the state. Corporation work differenlty because they not only have income, they also have corporate tax (main reason why giants like apple and facebook would have their seat in ireland, and definitely not here)
but that's only for working class level really, if you go above i have no clue but whatever it is they got lots and if you're in politics, you don't pay anything at all, politicians are exempt from tax.
So its hard to answer, do you draw a straight line based on numbers like "if you have x a year you're rich" ... and how much more would that be, germany is a powerhouse because it still has industry and it basically had to be re-built from scratch after world war 2, that's why they're on top, they got a headstart in the golden years, not cos they got more taxes lol
i think the need for ubi is more pressing than taxing the rich, convincing them ubi is basically an investment in the survival of capitalism should take precedent than forcing them to re-distribute
forcing is never good, evolution over revolution if something doesn't evolves there's always a pushback, every revolution has a lashback
so im not sure because that would need strict numbers and plans
...
I'm generally exploring the concept of taxation. The prompt is not my general opinion and should be considered as a rather "vague" statement that allows for extensive interpretation. I think that taxation should not be progressive in nature. Forcing is never good but taking Germany as an example, the population, generally speaking, has great access to basic healthcare and excellent infrastructure, mostly paid for using tax revenue. I think it's in the best interest of all individuals to live a life with a minimum level of human dignity.
absolutely but you can't just put all countries on the same line, where i live there's virtually no industry anymore, no natural resources (as opposed to for instance norway where people get a "share" from the oil) germany is one of the powerhouses , i think they could technically do a lot better than they do now, not like switzerland or luxembourg. One or two years ago switzerland proposed a ubi for every citizen of somewhat above €2000, that's unheard of really and it didnt pass for some reason (probably because a lot of people confuse it with wellfare while it is a basic income for EVERYONE, young old, man woman working or not)
belgium here also has what's considered great healthcare, which is fine if you come down with the flu or a common cold, you want your blood tested or you want a scan done it won't cost you an extra mortgage but if you get really ill it still comes down to who's rich and who's not because poor people still can't afford extensive prolongued treatmens, and with the ageaing population nurseries and hospitals have become "industry" not public sector, they're like factories rolling and rolling out. And also because ageing populace there's less to share and more gets spent. Which they try to cover by telling people to get more kids which i think in 20 years will result in doubling the problem as automation and a.i. takes over a lot and manufacturing jobs (among others) and classic industray all but fled the country for cheaper places. SO they'll have lots of potential workers to work for the pension funds the government "misplaced" but there won't be any jobs so that's potentially two or three times the people they have now on wellfare, and 40 years later, thats 2 or 3 times the ageing population they have now.
I don't know who does their math or maybe i'm too simple to get it seeing as i dont have paper degrees but i think my version is more realistic and they just want the votes NOW because 40 years from now
they won't be here anymore. . .
population stop, ubi and all efforts towards space mining / colonization is the only solution i fear, barring world war 3 or a pandemic but the last options don't sound too alluring ... my cat doesnt like loud booming noises :)
Let’s not any of us pay taxes :) so much work figuring them out . Oh and let’s not forget our hard earned money just going for ????????? Just for the record I pay my taxes but I hate it every step of the way
Let’s not any of us pay taxes :) so much work figuring them out . Oh and let’s not forget our hard earned money just going for ????????? Just for the record I pay my taxes but I hate it every step of the way
The rich got rich by stealing from the poor, and that same poor have been paying for everything. It is time they paid for everything for once..
lo unico que te puedo decir que aqui en cumana solo violan a los derecho
menos mal que yo soy zurdo
Congratulations @linus.lin! You received a personal award!
Click here to view your Board
Do not miss the last post from @steemitboard:
Congratulations @linus.lin! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Vote for @Steemitboard as a witness to get one more award and increased upvotes!
Let’s not any of us pay taxes :) so much work figuring them out . Oh and let’s not forget our hard earned money just going for ????????? Just for the record I pay my taxes but I hate it every step of the way