In the United States today, there are six different tax brackets. For those of us that are not brushed up on the tax code in the US, we will have a quick, crash course in the basics.
For individuals and married couples alike, there are six tax brackets. Each bracket taxes a different portion of your income, and, as your brackets increase, the rates go along with them. For individuals, these tax brackets are at $0-$8300 (10 percent), $33,950 (15 percent), $82250 (25 percent), $171,550 (28 percent), $372,950 (33 percent), and everything beyond this is taxed at 35 percent. So, for example, a first-year teacher making a $42,000 salary would pay:
$8300 x .10 = $830
($33950-$8300) x .15 = $3,847.50
($42,000-$33,950) x .25 = $2012.50
= $6690.00
Now remember, this is just the federal income tax. There are still state taxes to be added on.
What I want to point out about our system is this: our brackets end at $373,000. Why?! In a nation where millionaires walk our streets, why would we flood the first $300,000 of income with six different tax brackets without adding more to the upper echelons? It seems rather insane to continue with this system. This method provides a reason for people to not look for work and it is simply an unjust policy.
Think about this situation. If you are someone who is not working at the moment because you cannot find a good paying job, will you take one that has a lesser pay scale? Of course not! Why would someone work on minimum wage for 40 hours a week and make around $15,000 only to have it taxed at 10 percent. It is my opinion that starting out someone on taxes is harmful on our society. We should end the practice now so that we give a stronger incentive for people to work in the first place.
Not only is it a non-incentive, though, it is unjust. People who make one million dollars a year have over $600,000 that is taxed at the same rate, and the rate is rather low. How can this be? What do they have to say to nurses, life-savers who work considerably harder for an already lesser reward and are taxed at three or four different rates?! On top of this, think about college students! People like me and my friends who want to work to help pay off college loans right now but see it as irrational. Why is it irrational? Because we can only work so many hours a week, and with 10 percent always being taxed out, we'd come home with very little in reward. If you aren't going to give a real, formidable way to make college affordable, at least give us a way to afford the huge costs.
What is the Witmer Tax Plan? It is not completed. The idea, though, is that taxes for everyone earning under the poverty line (which is around 10,000 dollars for individuals and about 19,000 dollars for a family of three) would be completely abolished. The first tax bracket would then be increased by a percentage point or two. To compensate for the large loss of revenue, we would add a few tax brackets to the top, and increase the present last ones to 40 percent. I believe the added tax breaks would be at 600,000 dollars, 900,000 dollars and one in the millions. The tax brackets would increase by intervals of ten or so.
For those who believe the rich need the huge amounts of money they acquire each year, and therefore would be against this plan on the grounds of successful trickle down economics, I say these two things to you: the trickle down theory is NOT successful, and the tax brackets for millionaires used to be at 90 percent. Millionaires will be fine. Government needs to protect those with little from those with lots; that is, the have-nots from the haves.
Its something we must do. If not for the moral or ethical reasons I have laid out, then simply for the fact that every Senator, Representative, and President takes an oath to uphold the Constitution, and, therefore, vows to promote the general welfare of all the People, not just the wealthy and prestigious.
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4 comments:
I would just like to say that the Tax system is much more complicated than you make it seem to be. It is in fact so complicated that you can obtain a maters degree on the subject. That being said the government has already addressed the fact that someone making very little money would pay taxes. The standard deduction and the personal exception. After taking these two things a person making $15000 dollars a year would only pay taxes on $5650. Also there are many provisions within the tax code that are not favorable for people making above 100,000 dollars. I do not think that it is appropriate to think that those making one million or more a year need to pay a higher percent rather than let them reinvest in Non Profits or Businesses. Please read more of the tax code.
I have read more of the tax code. Simply put, my stance is that if we are going to tax these people and give them deductions later on, there is no reason to tax them. In fact, it makes our system more confusing and less efficient. Why not allow the poor and middle class to keep their money instead of giving it to the government, only to have it returned to them later on?
I would rather not trust the rich to do the right thing and invest in non-profits. This is a theory that is left up to chance. My belief is that we should not leave things like this up to chance. Simply put, government taking too much and giving it out to people who need it rather than taking too little and allowing the rest to be put up to a possible donation is more assuring to me, personally.
Thanks for the comment, though.
In an environment where only gallons upon gallons of dollars being pumped into the system daily keep our economy above the waters of recession, do you really want to increase taxes which have a negative 3 multiplier on economic growth?
And I might be mistaken, since I'm no tax expert, but aren't the deductions immediate? That is, peole don't pay money to the government, have to wait some months, and then get it back. They only pay the taxable amount after deductions.
Apparently you didn't read the tax code because as MRS said you don't have to pay the money to the government. These deductions are above the line that is before the calculation of taxable income.
As far as trusting people to do the right thing, the system currently rewards the wealthy for donating money or establishing a charity. The governments motivation for this is clear. If an individual is going to take their income and use it to fund programs that would otherwise be covered by a government entity then they in fact are helping the government and should not have to pay taxes on these funds. I think this is a great system and makes sense. A persons income otherwise will be taxed.
So if you increase the end tax then the wealthy would keep more money than donate it so that they can maintain their after tax income.A system that increases the tax brackets on the wealthy will either have a net effect of zero or negative because charitable donations will go down in proportion to money collected by the government.
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