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

Updated on October 4, 2016
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 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.

  • 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
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

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.

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
  • 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.

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
  • 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.

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

© 2011 Paul Goodman

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    • mortimerjackson profile image

      mortimerjackson 5 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.

    • WD Curry 111 profile image

      WD Curry 111 5 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.

    • i_am_monk profile image

      John Crozier 5 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.

    • wba108@yahoo.com profile image

      wba108@yahoo.com 5 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.

    • profile image

      Dragon 5 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.

    • JON EWALL profile image

      JON EWALL 5 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

    • TheAlchemyst profile image

      Arthur Gwynne 2 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.

    • bradmasterOCcal profile image

      bradmasterOCcal 2 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?

    • wba108@yahoo.com profile image

      wba108@yahoo.com 2 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 2 years ago from Orange County California

      what happened to equal protection?

    • Adam Palm profile image

      Adam Palmer 2 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.

    • JON EWALL profile image

      JON EWALL 2 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

    • Earl Owens profile image

      Earl Owens 20 months 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

    • profile image

      steve smith 8 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?

    • profile image

      BDS 3 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

      ptofgogjkf 3 months ago

      yes they should

    • JON EWALL profile image

      JON EWALL 3 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

      Kokinyertwot 2 months ago

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

    • profile image

      Lois St Cyr 4 weeks ago

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

    • profile image

      Lois St Cyr 4 weeks 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 !!!!!!!

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