Tax policymaking has become too politicized to result into sensible and effective mechanism that can lead to fair to middle class families. Tax policies have become increasingly favorable to the rich harming the average American household in the process (thesis). Policies that are beneficial to the rich increasingly characterize the tax climate in America (topic sentence). This is demonstrated in many of the tax cuts, such as the dividend and capital gains tax cuts, which favor the upper-income Americans. (Soss, 2010, p. 13) (citation) A recent development that further supported this point was when Doug Edward grabbed headlines recently. Speaking for the so-called Patriotic Millionaires for Fiscal Strength, he strongly urged the government to tax millionaires like him. (Garofoli 2011) (citation) Although not all of the wealthy elite would certainly agree with Edward and his group, this development demonstrates an increasing public alarm over the obviously biased attitude of the government towards the rich. A Gallup poll released last September showed that the majority of Americans favor raising the taxes of the wealthy. (Seligman 2011) (citation) This sentiment is echoed across all platforms of the public discourse. Both from the perspectives of policy decisions and the public perception, there is a clear evidence that taxation policy is not equitable among social classes. (wrap up) Central to the current taxation policy is how politics erodes the ideological divide on the issue of taxation.
(topic sentence) In the past, the country’s taxation policy changes according to the regime in power. The public has seen this political dynamics in the tax policies of the Roosevelt, Bush and Clinton administrations. The Republicans' preferred model is the conservative policy wherein the rich are not taxed as much, fearing its impact on their ability to invest. (Garofoli, 2011) (citation) On the other side, there is the progressive approach to the economy that prescribes greater regulation and equitability of wealth. (Clark, 2011, p. 474) (citation) The American public votes for its policymakers partly because of this ideological distinction. Today, however, Democrats are increasingly becoming silent on taxing the rich. This is because the polarity of the political environment has made the wealthy elite in a better position to influence policy. Politicians – both the Democrats and the Republicans turn to the millionaires in their bid for electoral victory. According to Bartels, this is the reason why contemporary presidents are faced with the increasing difficulty of influencing macroeconomy, they resort to tax and transfer policies as a means to repay political support. (p. 60) (citation) This appears to be the case today with the glaring non-action on the part of the current democratic administration on tax cuts, tax credits, and related tax mechanisms that support the rich and harm the financial security of the ordinary Americans. (wrap up) An unfavorable tax regime can lead to adverse effects on the economic well-being of middle-income households. (topic sentence) As the middle class bears the brunt of taxation, they are increasingly exposed to financial risks and financial instability. A Senate report, for instance, found that after adjusting for inflation, the median household income fell by over $1,400 beginning in the year 2000. (GAO, 2009, p. 108) (citation) The report also cited that the poverty rate rose as well in the same period. This economic reality is aggravated by