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Jason JubasMay 10th, 2019Professor Brian TrimboliFirst Year WritingSocialism in America???????“In this world, nothing is certain except death and taxes” (Benjamin Franklin). The first income tax was created during the Civil War in 1861 as a mechanism to finance the war effort. However, it was not until July 2, 1909 where Congress passed the 16th amendment, granting the United States government the power to lay and collect taxes on income annually. Nobody enjoys paying taxes, but it is a necessity for all patriotic citizens in order to establish and maintain vital services and amenities provided by local, state, and federal governments. For example, fire stations, emergency medical services, police protection, roads, bridges, electrical services, hospitals, and the army all require funding that is paid by the taxpayers. It is generally understood that taxes are crucial for allowing society to function and will continue to exist for eternity; however, who is paying for a majority of these taxes is a commonly heated debate today.The Revenue Act of 1862 established the first progressive income tax in the United States. A progressive tax is a tax in which the average tax rate increases as the taxable amount increases. Progressive taxes are imposed in an attempt to reduce the tax burden of individuals who have lower incomes by shifting the bulk of the tax burden on those individuals who have the higher incomes. Those people who claim that higher salaries enable affluent individuals to pay higher taxes support this tax methodology. In their eyes, this is the fairest tax system since it reduces the tax burden of the poor who have the lowest amount of disposable income, allowing them to afford basic survival needs such as food and shelter. In contrast, a flat tax rate has one single tax rate. Everyone carries an identical responsibility and nobody is burdened unequally. A flat tax does not discourage individuals with higher incomes from earning more. Therefore, a flat tax rate reduces the potential deadweight loss of taxation and encourages a stronger work ethic (Investopedia). Why would someone work harder to earn more money if they know that seventy percent of the money will be going to the government anyways? Proponents of a flat tax state that they should not be paying more than others just because they work harder to earn more money. On one hand, taking the same rate of money from the rich and the poor has an unequal effect. For example, taking ten percent of a millionaire’s income will not disparage him or her from purchasing necessities such as food or heating. If you charge the same ten percent to a poor person, he or she may not have the same ability to purchase those essentials. A flat tax system will hurt those with low incomes while a progressive tax system lets the same individuals live a better life at the cost of a few irritated rich people. On the other hand, why should someone be charged a higher tax rate when they are working harder to attain that income? The Declaration of Independence states, “all men are created equal” (Thomas Jefferson 1776). The richer individuals are already being charged more in taxes since they are earning a higher income. Even on a flat tax rate people with a higher income will pay more taxes; thus, a progressive tax rate is essentially a form of double taxation since higher earners pay more tax and at a higher tax rate. Furthermore, not only are these individuals being double taxed, but also their taxpayer dollars are being spent to support programs such as welfare for those who barely pay taxes if any at all. A recent study displayed that the top one percent of Americans pay forty-three percent of the income tax with the top twenty percent of Americans by incomes pay eighty-seven percent (Laura Saunders). Moreover, the poor are already receiving cash benefits such as welfare as well as in-kind assistance through health care and food stamps. Other governmental programs such as the Temporary Assistance for Needy Families, Supplemental Security Income, and Earned Income Credit exist to ensure that the poor are able to afford the basic necessities and thus negates the main argument of those who opt for the progressive tax. Lastly, progressive taxation creates a lower tax take for the government due to resentment, increased tax evasion, and most importantly, a reduced incentive to work. This outcome is not in anybody’s fiscal interest regardless of whether they favor large or small amounts of taxpayer-funded spending since it equates to a more demanding system producing detrimental results (Paul Krugman).I believe that everyone should be treated equally and fairly. With that being said, I do not think that it is fair to impose a progressive tax on the rich just because they earn more. Those who work deserve to receive their hard earned money, regardless of how much they are receiving. In my opinion, the best way to solve this predicament is to establish a flat tax rate, but allow the first ten thousand dollars of income to be tax-free. This method allows the poor to use their money for necessities, while still treating everyone equally. Also, there are still plenty of need-based programs for the poor if ten thousand untaxed dollars is not enough. By imposing a progressive tax rate, the United States is veering away from their capitalist society in a socialistic manner. Sources: Investopedia. “Is a Progressive Tax More Fair than a Flat Tax?”?Investopedia, Investopedia, 12 Mar. 2019, ask/answers/042815/progressive-tax-more-fair-flat-tax.asp.Saunders, Laura. “Top 20% of Americans Will Pay 87% of Income Tax.”?The Wall Street Journal, Dow Jones & Company, 6 Apr. 2018, articles/top-20-of-americans-will-pay-87-of-income-tax-1523007001.Krugman, Paul. “The Economics of Soaking the Rich.”?The New York Times, The New York Times, 5 Jan. 2019, 2019/01/05/opinion/alexandria-ocasio-cortez-tax-policy-dance.html. ................
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