Progressive income tax offers many advantages
Oliver Wendell Holmes, U.S. Supreme Court Justice from 1909-1932, said, “taxes are the price we pay for a civilized society.”
Taxes go to paying for public safety, schooling, clean water, clean food, highways, bridges etc.
So the idea of why we have taxes is understood, the question however is, “what is the fairest and most ideological way to distribute taxation?”
Let us consider three of the most popular options progressive, regressive (trickle down policy), and flat tax.
Since the income tax was first introduced in 1909 there has been heated debate over what percentage the different income levels should be taxed.
We have seen the positive outcome that occurs when we have a progressive taxing system; the best example is during the eight years that Bill Clinton was president.
During the years from 1992-2000 we had the lowest unemployment rates in 30 years, the most new jobs created under a single administration, and three consecutive years with a budget surplus (including a record $237 billion surplus in 2000).
No progressive Democrat wants complete “equalization” of people’s income, nor do they cry the “Every Man a King, and Every Woman a Queen” slogans of Huey Long, prominent political figure during the Great Depression.
But they do wish to see a change in the percentage of the taxing system in a way that the everyday consumer has improved purchasing power and not only the wealthiest of American’s.
Sadly we have learned once again that “trickle-down economics” is a dead practice, and usually those on the bottom are left to quench their thirst with the dust of corporate greed.
It allows the rich to get richer while throwing the tax burden on the average Americans which in turn dissuades the consumer from spending more money and eventually has an inverse effect.
I have also heard that a flat-tax is the way to go, because it fairly gives every person with any income the same percentage of income tax.
As good as that sounds, if properly considered the “flat-tax” can be very unfair. Think of it this way, a man is making $20,000 a year working at a desk job, and another is making $300,000 in management over the same company.
If both are taxed 15 percent, the first man will pay $3,000 in taxes leaving him with $17,000 after taxes, and the other will pay $45,000 leaving him with $255,000.
Clearly that flat percentage drops a heavier weight on the lower income person than the wealthier making it more of a regressive system.
Also with a flat tax the majority of people will be left paying more in order for the government to receive the same amount of collected taxes it currently does.
Now, the most used argument against the progressive income tax is “Why punish the successful and reward the unsuccessful?”
Well clearly taxation in any form is a punishment for anybody, when actually this system will eventually reward the successful while the consumer decides what to spend their money on.
Let’s say the man who makes $20,000 a year pays 10 percent in taxes and the man who makes $300,000 a year pays 30 percent in taxes.
The first will be left with $18,000 ($1,000 more than 15 percent), and the manager will still be making $210,000, all the while putting $1,000 more in the average consumer’s hands to purchase more goods from the manager’s business.
Therefore the progressive tax will raise their revenues, give them a higher income eventually cutting their losses, and a better chance to make a greater profit.
I’m not suggesting a socialist or communist taxing system that creates equal incomes for all individuals.
I’m simply suggesting implementing a fairer taxing system that doesn’t only meet the desires of the affluent but more so for the many who have little.
The same system that Thomas Paine (one of the most influential revolutionaries of the 18th century) openly endorsed in his famous “Rights of Man,” the same taxing system that Theodore Roosevelt and later his fifth cousin FDR fought for, to give the working man and woman a more evenly distributed purchasing power, which is the strength of our economy.
Tony M. Burge, Jr