Publisher’s Points to Ponder: Taxing the Wealthiest
Some of you may have read the guest editorial in the Times Record News newspaper titled “Taxing the Wealthiest? Not so Fast.” The writer believes the growing acceptance of increasing taxes on the wealthiest could be an indication that the Republican Party could go too far to the left, despite the party’s attempt to pull America further to the right as indicated by public support of the tax rate increase proposals presented by Representative Alexandria Ocasio-Cortez (D-NY) and Senator Elizabeth Warren (D-MA).
Warren’s proposal to create a new wealth tax of 2 percent each year on assets more than $50 million. Ocasio-Cortez raised eyebrows across America after her interview on “60 Minutes” where she said the U.S. should raise taxes on a portion of income earned by top wage-earners; Her proposal calls for a 70 percent tax increase on every dollar after the individual receives $10 million in a single year. The Hill-Harris X poll indicates that 59 percent of registered voters agree with Ocasio-Cortez, with 62 percent of women and 55 percent of male registered voters in support of the tax increase to the wealthiest. What’s more surprising is that 49 percent of Republican voters favor the increase.
Considering the more than $22.7 trillion U.S. federal debt reported in the 2019 federal budget, increasing taxes may be a reasonable solution that would raise the revenue above the $4 trillion of federal revenue the government takes in annually. This tax increase would affect only 1 percent of the top earners who currently pay approximately 38 percent of the federal income taxes in contrast to the 48 percent of earners that do not pay any federal income taxes.
Although tax increases generally hurt the economy, the idea of taxing the wealthiest is not a new idea according to a 2016 Gallup Poll that shows Americans felt that upper-income earners do not pay enough taxes. A 2017 Ipsos/Reuters poll shows that every three out of four Americans said wealthier Americans should pay more taxes. However, before jumping to the conclusion that the wealthiest should have a higher rate, you should be aware that with increased taxes, the economy slows down due to the decreased federal revenue resulting from pay cuts and layoffs along with the increased federal spending on entitlements such as unemployment benefits. It does not matter which side you’re on; tax increases are not good for the economy and have historically reduced the amount of public support paid to charities.
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