Taxes Should Go Up for the Upper Class - Essay Example

? Taxes Should Go Up for the Upper Taxes Should Go Up for the Upper One of the controversial issues that continue to pervade contemporary societies is taxes. The issues that are subject for debate include the percentage of taxes to be imposed on various individuals and organizations; as well as the kinds of taxes to be imposed on consumers products or services purchased and availed. Government institutions have confirmed that taxes are important as a means to generate revenues and to thereby enable the funds to be earmarked for various programs, projects and endeavors that would likewise benefit the general public. Concurrently, taxes are being imposed on all earning individuals and organizations regardless of social structure or the level of income being generated. As far as one knows, the taxes imposed include the individual income tax, social security and Medicare taxes, corporate taxes (for organizations), and excise taxes (for products such as cigarettes, alcohol, gasoline, and even airline tickets) (Public Agenda, n.d.). The challenging part for government officials, legislators, and economic advisers, is to accurately agree on a unified stance regarding which segment of society is it most appropriate to impose higher taxes to. One firmly believes that since the upper class level has greater potentials and resources to earn, taxes imposed should go up for this particular level to enable the government to collect greater revenues, earmark more programs and projects, and establish an equitable system of government taxation based on capacity to pay, among other reasons. Higher taxes should be imposed on the higher income group. According to Monsebraaten (2010) in her article which appeared on the Toronto Star, she cited the president of TD Bank, Ed Clark, to aver that “as the country emerges from recession, Ottawa should consider cutting taxes for low-income Canadians who are being hit by both economic restructuring and an inequitable tax system that "discourages people from participating in the workforce" (Monsebraaten, 2010, par. 1). As evaluated, higher taxes to be imposed even in low-income earners would discourage people from joining the workforce and thereby preclude the government from generating individual income taxes. This was corroborated by La Follete (1938), who, in his article entitled “Taxes Should be Higher – but fewer and direct”, indicated that “taxes should be levied in proportion to the ability of the taxpayer to carry the burden. Graduated income and estate taxes are based upon this sound principle” (La Follette, 1938, p. 23). In a closer look at the components of earnings being subjected to taxes, Kuhnhenn (2012) disclosed that the proposal from presidential contender, Mitt Romney, indicated that a tax cap on deductions must be explicitly set to $17,000 to prevent higher income earners to present large amounts of expenses to be deductable from their taxable amounts. As averred, “Mitt Romney's idea to impose a $17,000 limit on taxpayer deductions would hit hardest on wealthy Americans, who make the most use of deductions to reduce their tax burden… Roberton Williams of the Tax Policy Center said higher income taxpayers are much more likely to itemize their deductions than lower income taxpayers. "So right away this is going to affect people at the top end more than at the bottom," he said” (Kuhnhenn, 2012, pars. 1 & 10). The effect is still higher tax revenues to be generated from the higher income group, who have the greatest potentials to earn from a variety of sources; therefore, it validly supports imposing higher taxes to the upper class group. Another point of contention that supports imposing higher taxes on the upper class is the inverted pyramid structure of income distribution. As emphasized by La Follette (1938), “the distribution of income among the people may be represented by the familiar figure of a pyramid. At the top are a few millionaires. At the bottom are the multitudes of people who have little or no income. The inequalities illustrated by this income pyramid can to some extent be evened out by scaling tax rates upward, so that each will pay according to his means” (p. 23). It would therefore be irrational to impose higher tax rates to the lower income groups who do not have the potentials to earn higher income; and whose earnings are barely enough to support their daily living expenses. The principles of utilitarianism does not favor imposition of a heavier burden to a greater number of people; when the higher income group definitely and clearly has greater abilities to shell out payments for higher taxes. A just society thereby supports the goal and interests, not only of a limited few, but of the welfare and greater good of the greatest number of people. Imposing higher taxes to the upper income level affects only a limited number of millionaires who could readily afford to pay the additional amounts in higher taxes, and the revenues to be generated from them could be effectively utilized for the welfare of many. Overall, one has clearly supported the contention that higher taxes should be imposed for the upper class level since the people who compromise the high income group are more than capable to pay increased taxes, pursuant to the principle of the capacity to pay. Likewise, tax revenues to be collected and generated from the upper class level would enable the government pursue implementation of more programs and projects that would benefit the lower income group. Imposing higher taxes to the upper class level would assist in stabilizing inequalities in current the taxation system ultimately based on these people’s amount of available resources, wealth, and their appropriate capacities to pay. This move would therefore be consistent with making the most ethical, moral and legal decision consistent with the principles of providing the greatest benefit for the greatest number of people. References Kuhnhenn, J. (2012, October 4). Romney looking at different caps on tax breaks. Retrieved from Associated Press: http://web.ebscohost.com/src/detail?sid=97b1087d-5c8d-4322-9fce-db1980b563fc%40sessionmgr14&vid=9&hid=122&bdata=JnNpdGU9c3JjLWxpdmU%3d#db=n5h&AN=fe40849399af4a22acda1d6885716374 La Follette, J. R. (1938, June 11). Taxes should be Higher - but fewer and direct. Retrieved from Saturday Evening Post: http://web.ebscohost.com/src/pdf?sid=52b819e5-6e67-4ac6-bdbb-c263c5df6fae%40sessionmgr14&vid=6&hid=12 Monsebraaten, L. (2010, November 26). Lower taxes for the poor, TD boss says . Retrieved from Toronto Star: http://web.ebscohost.com/src/detail?sid=4c2793d8-083c-40d3-9150-aa45636a07a3%40sessionmgr4&vid=7&hid=12&bdata=JnNpdGU9c3JjLWxpdmU%3d#db=n5h&AN=6FP0068086845 Public Agenda. (n.d.). Can We Bring More Fairness to the Tax System AND Make Revenues Match Spending? Retrieved from http://www.publicagenda.org/facingup/pdfs/Revenues_and_Taxes_discussion_guide.pdf Read More