Should We Tax the Rich More? (Pros and Cons)

Updated on December 18, 2017
PaulGoodman67 profile image

Paul studied philosophy at the University of Leicester, UK and has done a variety of jobs since, including advocate, librarian, and writer.

The Internal Revenue Service Building in Washington, D.C.  The federal building was designed by Louis A. Simon, and built from 1928 to 1936.  It serves as the headquarters of the Internal Revenue Service in the USA.
The Internal Revenue Service Building in Washington, D.C. The federal building was designed by Louis A. Simon, and built from 1928 to 1936. It serves as the headquarters of the Internal Revenue Service in the USA. | Source

What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin.

— Mark Twain

Should we tax the rich more? There is an ongoing debate in the USA and across the world about how big the tax contribution of the wealthy should be and whether it should be increased.

As economic problems have intensified in recent years, so has the debate. The people on the left of politics generally want higher taxes for the wealthy, insisting that they can easily afford to make a larger contribution. Whereas people on the political right generally argue that increasing taxes for higher earners is counterproductive and may actually worsen many of the problems that it is supposed to solve.

Below, I have laid out what I believe to be the main pros and cons of the argument that we should tax the rich more.

The hardest thing to understand in the world is the income tax.

— Albert Einstein

Why is it that if you take advantage of a corporate tax break you're a smart businessman, but if you take advantage of something so you don't go hungry, you're a moocher?

— Jon Stewart

Pros: Why we SHOULD tax the rich more

  • When economic times are tough, the government needs to look at ways of bringing in more money. Increasing taxes on the wealthy makes sense, as they are the ones who are most able to afford tax increases.

  • A progressive tax system can prevent wealth discrepancies from getting too large. When the gap between rich and poor gets beyond a certain point, there is an increased risk of social instability and strife, such as crime and political turmoil. Big differences in wealth are also seen by many economists as one of the factors that led to the Wall Street Crash in 1929.
  • Taxing the rich can also be justified on moral grounds, if it is used as a form of wealth redistribution, with the tax money raised being used to aid the poorest sections of the population.
  • Countries such as Australia, Sweden and Canada all do relatively well in terms of growth, despite them having high taxes.
  • Since the 1970s, the income of the wealthiest members of society has increased dramatically, while the income levels for the rest of society have barely moved in real terms, which means that adjustments need to be made.
  • Money is needed to pay for defense, health, education, social security, etc and it has to come from somewhere.

The corporate right fires up the religious right against gay marriage and abortion and uses their votes to push their deregulation and tax cuts for the rich. It's an old trick. The House of Saud has the same arrangement with the Mullahs in Saudi Arabia.

— Adam McKay

A Brief History of Taxes in the US

  • The American Revolution is kick started by a rebellion against British taxation policy in the 1760s.
  • The newly independent US collects taxes on imports ("tariffs"), whiskey, and (for a time) on glass windows.
  • States and localities introduce a poll tax, which applies to voters, and a tax on property.
  • State and federal inheritance taxes start after 1900.
  • States impose sales taxes in the 1930s.
  • Income taxes are imposed temporarily during the Civil War, but it is not until 1913 that they are brought in on an indefinite basis.

Occupy Wall Street protestors in Manhattan 2011. The movement believes that wealth inequality has reached intolerable levels, and that the bankers who caused the 2008 economic crisis were treated far too leniently.
Occupy Wall Street protestors in Manhattan 2011. The movement believes that wealth inequality has reached intolerable levels, and that the bankers who caused the 2008 economic crisis were treated far too leniently. | Source

We don't need new taxes. We need new taxpayers, people that are gainfully employed, making money and paying into the tax system. And then we need a government that has the discipline to take that additional revenue and use it to pay down the debt and never grow it again.

— Marco Rubio
High tax bills aren't just a headache for individuals and businesses, they can also stifle the wider economy, providing a disincentive for investment, hard work, and innovation.
High tax bills aren't just a headache for individuals and businesses, they can also stifle the wider economy, providing a disincentive for investment, hard work, and innovation. | Source

Cons: Why the rich SHOULD NOT pay more tax

  • Governments already waste much of the money that they collect. If taxes are increased, all that will happen is that the government will just have more money to waste and there will be no incentive for them to spend efficiently.

  • Raising taxes acts as a disincentive for individuals and businesses to make money. Some of the most talented people and businesses will leave the country and find somewhere with lower taxes, if they feel that their efforts are not being rewarded sufficiently.
  • There is no public appetite for adopting higher taxes and the high taxation rates that were used in the past are now seen as a failure. High taxes in the past slowed the economy and lead towards stagnation.
  • Cutting taxes for business has been shown on numerous occasions to actually increase overall revenue. Increasing taxes, on the other hand, just makes businesses alter their investment, spending and tax behaviors in order to find ways of cutting their tax expenditure, which generally leads to an overall decrease in revenue for the government.

  • Higher taxes inevitably lead to a reduction in investment, as the people most likely to invest have their money supply hit. If there is less investment, then there are less businesses and unemployment increases. With more people out of work, there is less money being spent and the economy goes into a downward spiral.
  • Increasing taxes for the wealthiest is socially divisive and encourages a class war situation where the poor and middle class begin to resent the rich, and the rich, who find themselves paying an increasing share of the tax bill, resent the poor and the middle class in return.

Rather than passing a thousand pages of tax reform legislation and restarting the tax code manipulation process, we should change the paradigm. It is time to eliminate the IRS and repeal the 16th Amendment.

— Jim Bridenstine

We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

— Winston Churchill
IRS Building in Washington D.C.  People against tax rises for the rich argue that government departments already waste much of the tax revenue raised.  Increasing taxes would just create more waste, as well as provide a disincentive for investment.
IRS Building in Washington D.C. People against tax rises for the rich argue that government departments already waste much of the tax revenue raised. Increasing taxes would just create more waste, as well as provide a disincentive for investment. | Source

When there is an income tax, the just man will pay more and the unjust less on the same amount of income.

— Plato

Should we tax the rich more?

See results

Questions & Answers

  • Can higher taxes contribute to a fairer society?

    Proponents argue that progressive taxes are an effective method for redistributing wealth and creating a fairer society through reducing financial disparities. Opponents argue that higher taxes unfairly penalize earners, act as a disincentive, and reduce the amount of money that businesses can reinvest.

© 2011 Paul Goodman

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Pyton 

      4 months ago

      Also, I want to add the world isn't fair get over it and grow up! A man that spends 8 years of his life to be a doctor should be awarded with alot of money because he earned it? So you think someone working at taco bell that just smokes weed all day after work should get paid the same as a doctor? That doesn't make any logical sense. There has to be an incentive to study years of your life away and that incentive is money. What's actually is not fair is people wanting to take away from that man that busted his ass off and sacrificed alot of time of his life that he will never get back. Again, I say get off your ass and get to work so you can make something of yourself.

    • profile image

      Bailey 

      4 months ago

      Well I am 26 and just finished college 2 years ago with a degree in software engineering. I didn't go to college immediately and found myself working 50 hours a week to pay everything and was miserable. I look back at all my struggles and think about the incentive to keep going to better myself. People shouldnt be punished for working harder than others. People want to rob from the wealthy and give to the poor. "All for one and one for all" that is communism! If there isnt an incentive to work hard, why would anyone bother? Great example of this not working is venezuela, cuba, and Russia. I make 110k a year now and I worked hard. I'm in a very high tax bracket now and it shouldn't be raised. The problem with my generation is they want everything given to them as if they are a child. My advice to everyone my age and younger is GET OFF YOUR ASS AND WORK FOR SOMETHING!

    • profile image

      S.A 

      5 months ago

      Great post! I think the rich should not have to pay more and this is coming from a lower middle class person. I plan on having a nice career when I get older and this definitely deters me away from it. Also, I get why people say they should but those people don’t think about the fact how those doctors, businessmen, whoever have worked their butts off to get where they’re at. They spent time studying their way through college to get to where they’re at. If liberals are all about fairness then where is the fairness in that. I’m sorry people, but that’s not how life works. You don’t just get handed things to you. Every single person on this planet has made a sacrifice. If you don’t like where you’re at today, take a look at yourself, the materialistic things you have, the decisions you’ve made in your life and your attitude. I truly believe that anyone can be capable of changing their lives dramatically. However, it’s not going to be handed to you and you might have to work a little harder for it but it just depends on how much you really want it.

    • profile image

      Vickie Hicks 

      8 months ago

      I think the rich should have to pay more taxes then anyone else in the country because they make(Have) more money then the little guy who has to work two or more jobs just make ends meet. If the rich have to work at minimum wage just like everyone else and not their millions then they see what is like to have to worry about paying their bills to just like anyone making $7.25 an hour just to get by.

    • profile image

      anonymous 

      9 months ago

      There are NO cons to taxing the wealthy.

      The Corporations and the Wealthy were taxed a lot more "during the first three decades after World War II, when the American economy grew faster than it’s been growing since the Reagan tax cuts."

    • bradmasterOCcal profile image

      bradmasterOCcal 

      9 months ago from Orange County California

      In 1916, John D. Rockefeller was credited as the first person in the United States to become a billionaire, according to The Motley Fool.

      In 1987 Bill Gates got his first billion. And today he has 90 billion.

      The point is that it is the Income Tax system that allows the rich to get richer. As long as we have the Income Tax System with its Internal Revenue Code IRC the rich have ways to get out of taxes.

      None of the presidents nor any 0f the congresses of either party have slowed down these billionaires. Today there are 540 US Billionaires and 1810 in the world.

      There are 10.8 million millionaires in the US today.

      So the last 8 years under a democrat president, and a democrat congress they never instituted any tax plan that retarded the milli0naires or billionaires.

      So the democrats balking about the GOP tax plan didn't do any better themselves in the last 8 years.

      In 1986, president Ronald Reagan created the Tax Reform Act. It was supposed to reduce taxes for the working employee. But the caveat was that it also came with those employees losing most of their useful deductions. Yes the taxes went down, but in a few years the taxes went back up. The deductions that were lost never came back.

      BTW, during the Obama term in 2013, congress moved the medical tax deduction threshold from 7.5 percent to 10 percent. That was a major loss of tax deduction for the elderly. And if the ACA was so good for the people, then why did congress raise the medical threshold. That increase would make sense if the government thought that medical expenses outside of insurance would rise.

      If you want an equitable tax program then think about a National Sales Tax. One that would totally replace the Income Tax. A Flat Tax would still have the Internal Revenue Code.

      The National Sales Tax would be like those already in most states.

      This NST could be between 10 and 15 percent. It wouldn't include the FICA Tax because that is a payroll TAX.

      My point is that neither party is interested in giving the middle class a tax break, and the poor either don't pay taxes or not much of it.

      When a rich person buys an 250,000 car or other such purchase. They pay 25,000 dollars in taxes period. NO deductions, exclusion, or deferments.

    • profile image

      thomas Ysrael 

      9 months ago

      If the government taxes the rich then the rich would just decrease the amount of money that they give their hard working middle class employees. So in the end the rich still make the same amount of money and the middle class suffers. Raising taxes would just make the rich tax collectors of the poor and middle class. Also, it's crazy to say that the rich are republicans because look at hollywood where 90% of them are democrats and the other 10% don't give a shit. In the end, we should decrease taxes so people can actually keep the money they make.

    • profile image

      Rainbows and Unicorns 

      10 months ago

      I think this is a bunch of Bullshit!

    • profile image

      Blanca Zuluaga 

      10 months ago

      We should tax the rich... inequality will keep increasing otherwise

    • profile image

      aye lmao 

      11 months ago

      we should just go with it man

    • profile image

      josh 

      11 months ago

      i believe we should at least tax the rich or at least raise it up a little we might end up in debt if we keep borrowing money from other countrys we should at least try to pay off some of the debt by taxing the rich

    • profile image

      Lois St Cyr 

      15 months ago

      If it wasn't for the poor, the rich wouldn't be rich. Please raise minimal wages to 12 to 15 dollars in Louisiana. Plus raise Retirement Social Security. Rent and every thing is gone up ridiculous high. Why should i move in a bad neighbor. You wouldn't. You want an increase so you should see the same for me .i also worked hard for 45 plus yrs. I deserve better income too. What ever reason you have , i have that plus more . i am black in america .You want to change places.i went to college and graduated in los Angeles. Just like you feel you should get more. I feel the same. SHAME ON YOU ALL FOR BEING SO SELFISH. NO HOME TRAINING AND NO GODLY HEART. ONE DAY YOU WILL REMEMBER ME. LOVE YA'LL ANY WAY !!!!!!!

    • profile image

      Lois St Cyr 

      15 months ago

      If the rich taxes can't be increase then raise waises all states , especially louisiana to 12 to 15 dollars hrly.

    • profile image

      Kokinyertwot 

      16 months ago

      Warren Buffet does NOT need a 9 million dollar tax break, does he?

    • JON EWALL profile image

      JON EWALL 

      17 months ago from usa

      Hubbers

      OPM other peoples money , that's the way to go

      3/1/14 Obamas set new record for vacation travel $100 million

      http://www.bizpacreview.com/2014/03/01/obamas-set-...

      thanks to the taxpayers!

    • profile image

      ptofgogjkf 

      17 months ago

      yes they should

    • profile image

      BDS 

      17 months ago

      The world isn't fair. Who the hell ever became a billionaire thinking about what was fair? I'm for taxing the rich because it just feels good.

    • profile image

      steve smith 

      22 months ago

      we need to tax the rich. giving a tax break will only postpone the tax and soon, somebody will have to pay for them. borrowing money from China and so forth, yeah that isn't working. So who do you want to be hit with taxes the 1% who could afford to lose a yacht or the poor struggling to survive?

    • Earl Owens profile image

      Earl Owens 

      2 years ago from USA

      A man knocks on your door puts a gun in your face and says give me all your money so I can give it to the poor. You call the police. You find out, He IS the police.

      Taxation is theft and immoral. Period end of story

    • JON EWALL profile image

      JON EWALL 

      3 years ago from usa

      Hubbers

      There is a reason why

      GEE, https://www.youtube.com/watch?v=y5CsrTMZAhA

      SHARED AGENDAS BARACK OBAMA

      http://www.discoverthenetworks.org/viewsubcategory...

      3/5 /15 A crippled presidency http://www.washingtontimes.com/news/2015/mar/5/don...

      his actions speak louder than words

    • Adam Palm profile image

      Adam Palmer 

      3 years ago from New York

      Now I must say, this is a well organized article and I truly enjoy how well you layout the pros and cons. Saying this, I also want to add in that the rich most likely because rich due to their work and dedication. The United State Constitution should defend that instead of public persecution.

    • bradmasterOCcal profile image

      bradmasterOCcal 

      3 years ago from Orange County California

      what happened to equal protection?

    • wba108@yahoo.com profile image

      wba108@yahoo.com 

      3 years ago from upstate, NY

      A favored tactic of the socialists,communists and leftists is to use the rich as a scapegoat. this only works because of the Constitutional ignorance of the American people. The plain truth is that the supposed rich are already paying more taxes both in total amounts and as a percentage of their income.

      Our competitive edge worldwide will disappear if this kind of left wing social engineering is permitted to continue. The example in Europe should be enough of a warning, that's why they had to immigrate to America to begin with. Americans are also historically ignorant, because the plain understanding of the past would refute they leftists in every way.

    • bradmasterOCcal profile image

      bradmasterOCcal 

      3 years ago from Orange County California

      It is wrong to single out the rich with higher taxes.

      Gays won claiming unequal protection, why shouldn't the rich have success with that same claim.

      why isn't the different tax rates unconstitutional?

    • TheAlchemyst profile image

      Arthur Gwynne 

      3 years ago from NYC. NY

      I think individual taxes at the Federal level should be completely removed. But I also think that states and local governments should be free to tax as they - and their communities - see fit. I'm fine with my tax monies being spent, for instance, on NYC health, education, and infrastructure. I'm not fine with my tax monies being spent on killer flying robots, corporate bailouts, or a police force (FBI) that has no oversight whatsoever.

    • JON EWALL profile image

      JON EWALL 

      6 years ago from usa

      PaulGoodman67

      Welcome to America, the land of the free and the brave.

      Check this link and be the judge. The President is running his campaign on ''FAIRNESS''?

      5/09/12

      Obamacare, Taxing jobs out of existence

      WHY are companies not hiring?

      http://www.humanevents.com/article.php?id=51364

    • profile image

      Dragon 

      6 years ago

      To be frank, the rich do not get tax breaks. People who own businesses get tax breaks. And since we live in a country where anyone willing to take a risk can start a business, the system seems fair enough to me.

      The government encourages people to start a business and make a large amount of money by giving them tax breaks. They do this because they know that if you start a successful company (which is honestly the only way to become rich, except in a small % of cases) even at a low tax rate, a wealthy person will pay more taxes in a month than the average job person pays in their life.

    • wba108@yahoo.com profile image

      wba108@yahoo.com 

      6 years ago from upstate, NY

      Good analysis, pretty balanced! I tend to believe in less government and less taxes because the larger the government gets, the greater the temptation to exploit the system. An analogy is that big piles of goodies attract more ants.

    • i_am_monk profile image

      John Crozier 

      6 years ago from Newcastle, Tyne and Wear, England

      If you raise the taxes on the rich they are more likely just to get up and leave to another country or route their money through swedish banks, these are the people that can do that. Even though there are more 'working class' people in this world than rich people, you still have to think that they are paying the same tax percentage as the 'working class' and that will yield more money for the government. In the UK to be in the top ten percent of earner you only have to make £140,000 per annum, rich people are good for a countries economy don't drive them out by singling them out and charging them more.

    • WD Curry 111 profile image

      WD Curry 111 

      6 years ago from Space Coast

      Paul.

      Thanks for coming over. We can use the help. Americans should keep this in mind. Our original sage and elder statesman (Benjamin Franklin) said this, "You will never eliminate the poor by getting rid of the rich." As an artist, I love rich people. They are my best customers. As far as I'm concerned, I hope we let them hang on to their money. The middle class and the poor aren't buying right now although I have lots of top notch stuff in their price range!

      P.S. I need to know about that membership thing, a little help please.

    • mortimerjackson profile image

      mortimerjackson 

      6 years ago from California

      So if the government wastes tax money, why should anyone pay taxes?

      What country can you think of as being a better tax haven than America?

      There is no public appetite for raised taxes because middle class and low class wages have been stagnant for decades.

      There will always be tax cheats.

      Higher taxes do not lead to less investment. With the right infrastructure, it can (and has in Europe) provide services for smaller businesses to grow and develop, thus encouraging competition.

      Socially divisive? So when the rich decide to stun middle class earnings, that's not class warfare? But when the middle class demand that the rich pay more taxes, that's class warfare?

      This is not a debate between people with a different ideology. It's a debate between people and corporations.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, toughnickel.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://toughnickel.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)