Don’t we need the “rich”? For our society to prosper don’t
we need investment and innovation from hard working educated Americans? Almost
every day an article comes out promoting a tax on the “rich” or the “Buffett”
tax. Taxes promote one thing: safeguarding our money. The average American wants
money for two basic reasons: to purchase something of value to them or to
invest to make more money. Both of these result in stimulating the economy
while taxation stifles it.
Most of the wealthy Americans are charged with being rich as
a bad thing. However, these people worked hard to get where they are. Relying
on data provided by the U.S. Census Bureau, in 2010, a worker with a high
school degree made an average of $50,561; a person with a bachelor's degree
made an average of $94,207; someone with a master's degree made an average of
$111,149. Obviously, there is trend: the higher the degree earned the higher
the income received. So as soon as we achieve the higher income level after
paying, what can be imagined as, a fortune for our education, we are then taxed
at a high rate. What, then, is our incentive to invest our newly earned
incomes?
Has someone ever asked you what you would do if you won the
lottery? Or maybe, what you would do if someone handed you a million dollars
today? Have you ever heard anyone say, “I would hoard it all”? I don’t think
so. They’d spend it on yachts, cars, vacations, or maybe even invest most of it
(this is what I would do). The best part is that all of this promotes economic
growth in some form. Giving people the opportunity to choose what they do with
their money will encourage spending. In 1981, President Ronald Reagan slashed the
top marginal income tax rate to 50%, down from 70%. This tax rate was again
slashed to 28% after the 1986 Tax Reform Act. Total tax receipts in the 1980s
doubled from $517 billion in 1981 to $1,030 billion in 1990, according to a recent
study by Laffer Associates. By lowering the tax rate, more revenue flowed into
the government, as a result of more investment, and out to programs to help those
less fortunate.
Increasing tax rates on the “rich” would only encourage
potential tax revenue to be invested outside the United States. In contrast, by
lowering the tax rates more tax revenue comes into the government and the wealthy
have more freedom to invest; thus, stimulating economic growth, job creation,
and a higher standard of living for all Americans. Let the “rich” invest in our
future.
