One of the hottest topics, especially in light of this November’s election, is how to balance the budget and reverse the skyrocketing national deficit. Over the last several years, the federal government has spent in excess of five trillion dollars that it did not have, and just through the first six months of the year the budget deficit has already hit $904 billion. Some people have made the argument that taxing the rich will solve the problem; however, when the numbers get crunched, it doesn’t add up: taxing America’s most wealthy citizens will not even come close to accomplishing the goal of balancing the budget. It’s actually a joke to even suggest that it would.
First of all, increasing taxes on people earning $250,000 or more is not increasing taxes on the “‘wealthiest Americans.” The wealthiest Americans earn a million dollars and much more. You also have to look at what is the desired result by doing so. Experts have stated that this will not make the smallest dent in our national debt. Duquesne University economics professor Antony Davies posted a video on LearnLiberty.org explaining that taxes on the rich would have to be raised to unheard-of percentages in order to eliminate the deficit.
If taxing the wealthy wouldn’t solve the debt, then where would this extra money go? Toward more entitlement programs? Expansion of an already ginormous government? Instead of proposing something that will divide us, we should be looking at ways to implement a flat consumption tax, which is far more equitable for everyone concerned.
Some flat-tax opponents argue that such a tax wouldn’t be fair because wealthy citizens would not be taxed on any of their investment income on stock dividends, etc. However, some have proposed an amendment that would allow most of such income to be subject to the same flat consumption tax percentage.
Ultimately, we must establish a tax system that works for everyone–not an easy task but certainly one that can be accomplished–and we must recognize the consequences of tax increases on people earning more than $250,000. Making $250,000 in the United States’ major metropolitan areas (where most people reside) is just getting by these days, especially if you throw in a couple of college-aged children. Additionally, people who have small businesses and file their tax returns as sole proprietorships (with employees) will be deterred to hire additional employees because they will now have to consider that more of their earnings will go toward paying more taxes—money that could have been spent on goods, services, and hiring employees. It’s a recipe for disaster that we have seen play out in various governments overseas.
Another factor that must be taken into account are the expected and unforeseen costs related to “Obamacare”? This program could be a problem especially for small businesses, which really are the “engine” for this country’s economic growth. This November’s election could be the most historically significant election in decades, past and future. It will define what Americans want their America to look like. It is a stark choice. A lot is at stake. Vote responsibly!
More Tax Help, IRS News and Tax Relief Tips:
- Michael Rozbruch Interviewed in Opportunist Magazine
- Ask the Certified Tax Specialist – Small Business Back Taxes
- Tax Relief Weekly News Round Up
- Tax Resolution Services Offers Returning Veterans Free Tax Advice
- National Association of Tax Resolution Companies Inaugural Conference