Should The Rich Pay More Taxes?
I figure it’s time to put my foot in the middle of this debate. Luckily, I believe that my opinion won’t be the death knell of this blog, nor do I believe it will engender lots of hate from either side. Balance; that’s what I like.
Let’s get this out of the way. In America, the rich already pay the most taxes. It’s not like they can’t afford it but some of them are paying close to 50% of whatever they make. Of course, the smart ones aren’t anywhere close to this amount because they find ways to divest themselves of some of their wealth through investments and donations, and if they strike the right balance they might even find a way to get out of actually paying anything at all.
Still, the majority are paying more taxes by percentage. Should they be?
The main reason, actually the only reason, I’ve ever heard for why they shouldn’t pay more taxes is because they create jobs. I hate saying it this way but that’s a lie that’s been perpetuated for decades. Just last month an article in Business Insider pretty much shut down that myth.
Instead, it said that, though some rich people do create jobs, what really creates jobs is having a robust middle class with money to spend so they can buy more stuff, which in turn gets manufacturers to make more stuff, smart people to create more stuff, and companies having to hire more people to make all that stuff.
Frankly, that’s a nice symbiosis for any country to have, since it’s the middle class that supposedly most of commerce is based on and geared towards. Even though all the billionaires in the world make up more than 2 trillion dollars of wealth, they’re not buying the stuff that the middle class buys; that 1%, with all its wealth, isn’t enough to sustain an economy.
So, now that we got that one out of the way, should the rich pay more taxes? President Obama believes so, as its a cornerstone of the Affordable Care Act. There’s no secret that I like this Act, as I’m a beneficiary of it. However, I acknowledge that it’s still not all that great for much of the middle class. I also acknowledge that, for once, I don’t believe taxing the rich more to pay for this, since they’re not going to be using it, isn’t quite fair either.
Of course, taxes are more than just about health care. On a federal level taxes pay for our legislators (there’s a good reason not to have to pay any taxes), highways and air traffic safety (good reasons for taxes) and many other things such as disaster relief. We need the money for that and for things like grants for college students, state education and welfare plans. We also need it for Medicare and Social Security, which so many people hate until they’re of age and need it.
Still, should all of this be put on the rich? Well, not exactly. I have some thoughts that I’d like to share on how to help with some of this country’s money issues that shouldn’t overly impact the rich but still helps this country out.
One, I believe that there should be a wealth limit on who’s liable to receive Medicare and Social Security benefits. Did you know that President Reagan, a multimillionaire, collected Medicare benefits and probably collected Social Security? I don’t actually know about the second one but I know about the first.
If I had my way, anyone that had savings or investments of more than a million dollars, or was collecting more than $75,000 a year in retirement, doesn’t qualify for either of these. They don’t need it but millions of other people do. Sure, I hear the argument that they paid into it and should get it; I’m betting they paid into lots of stuff they’re not getting back and got some breaks along the way that their less heeled counterparts didn’t. That would be my first move.
The second thing I’d do is allow the rich to protect half of all their earnings up front. I don’t think it’s fair that someone earned $10 million a year and the government gets half of it.
What I’d do instead is, for anyone who makes more than $750,000 a year, tax half of their earnings at a 50% rate, which means they’d initially owe a flat tax of 25% of all they earned. Then I’d allow for discounts up to 15% based off donations, investments and the like. Almost no one would get away with not paying any taxes in any year unless they owned a small business, incorporated or not, and their business earned less than a 10% increase.
One more thing I’d do, and this would be very controversial and yet pro-America, is to have very strict rules for companies that aren’t non-profits that employ more than 500 people. My rule would be that any company that moves more than 5% of its workforce out of the country, or cuts more than 5% of its workforce in a year and still makes a profit, doesn’t qualify for a refund, even if they qualify for not paying any taxes. I still remember a story about General Electric a few years ago getting a refund of more than $10 million from the government, which is a pittance to them, but made a profit for the year by laying off employees and closing some of its locations; that irked me to no end.
On the flip side, any company that created at least 5% more jobs that paid an overall average of $20,000 a year would get a tax break. I’m not sure how to do the math to determine what kind of tax break would be fair but let’s face the fact that it’s corporations that create jobs, not rich people, and if they need an incentive to help get people back to work that’s it.
I’ve written other articles over the years giving ways to spur the economy, and I always offer the caveat that my ideas may not be perfect but they’re ideas, something I don’t really see anyone else attempting to come up with. My way, the federal government can make more money, we might put more people back to work which also earns the government more money, the rich aren’t really hurt as badly (at least some of them), some loopholes are closed, and we possibly keep health care funded while having time to work on more serious health issues (such as keeping costs down, reducing medical errors, etc).
At least it’s a thought. I’d like to know your thoughts on what I’ve said and, please, offer your own suggestions on how our government can help get us on the road to recovery… not that we’ll be getting the political parties talking to each other congenially anytime soon anyway…