We are in one the worst economic crises of our times. Everyone agrees that we need to worry about the Federal deficit. One response by the Obama administration has been to revoke the tax cuts given to the top 2% of income earners (those making over $200,000 or more). I have heard people compare this to a ‘redistribution of wealth’. However, that’s a misinterpretation of what is actually happening. For the past several years, Americans earning more than $200,000 a year, have enjoyed tax cuts that those of us earning less than that have not enjoyed. Proportionally, the 98% of us making less than $200,000 a year pay more in taxes than those making more. By revoking the tax credit to the top 2% of people, my understanding is that tax collection will in fact be more even handed. Anyone who works today knows that just because someone earns more does not necessarily mean that they work harder. The percentage of my paycheck that goes to federal taxes, will be the same as the percentage of their paycheck that goes to federal taxes. However, since the top 2% make significantly more than the rest of us, the taxes collected from them would go a long way in working down the national debt. I’m not sure how collecting the same percentage of taxes from those in the top 2% of the nations workers is equivalent to a redistribution of wealth- it just seems fairer to me.
Your premise of what is fair to the top 2% of wage earners may be somwhat flawed. Those that are in that range have the ability to redistribute their wealth into non taxable areas such as off shore banking accounts. I believe that this provides no benefit to the economy and makes that wealth, "unproductive". By reducing or closing the tax loopholes and forcing those funds into something more productive such as a form of goverment COD with a lesser tax break involved may provide some funds for growth. The post stimulus economy has been slow due to the failure of the GNP to provide better growth and the use of those stimulus funds went to do nothing more than reduce debt, thus not providing the real growth needed in goods and services. This "redistribtion of wealth" is not the best solution, however.
ReplyDeleteThe reduction of government spending at all levels along with privatization of some services and development of the infrastructure can provide a better quality of recovery. By reducing goverment debt, as seen by the latest federal resewrve move to buy back bonds, a small but helpful move, we can have a better faith in the recovery of the economy and then see some tangible growth. The elections can send a significant message this November as to what we really can do if we get involved. Start a blog, run for office, or more importantly, discuss the issues and find those candidates that share your views and VOTE, can go a long way in making the political groundwork ready for the building of the economic recovery so needed.
PS your Mom and Dad are AWESOME !!!
Their Mom and Dad ARE awesome! Rock out with these debates guys. Keep them coming. Very educational for me, as I sit on the fence and don't really pay attention. I see pros and cons to both sides of the debates.
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