Taxes essay
At the moment, the change of fiscal policies is essential to keep the US economy growing. In this regard, the rich are traditionally subjects to criticism from the part of the public because representatives of the middle and lower class stand on the ground that the rich can afford paying more taxes, while the government supported the poor by means of bailout of large corporations and maintenance of taxes for the rich unchanged. Therefore, the rise of taxes on people making over $250,000 a year is an essential step to balance the economic development of the US at cost of cutting exorbitant profits of the rich that can be used for the enhancement of the economic growth of the US.
The introduction of higher taxes on people making over $250,000 a year will increase revenues of the federal budget to cover the growing deficit of the budget and public debt. Even though the rise of taxes for the rich will not close current financial gaps and deficit of the federal budget but this decision may be an effective tool to increase revenues of the federal budget because the rise of taxes for the rich will increase revenues from them (Chernick & Reschovsky, 2000). The federal budget will receive extra revenues due to the rise of taxes because, at the moment, the rich still can pay more taxes because of their high profits (Holzman, 2005). Therefore, this decision will not discourage economic activities of the rich or the flow of the capital offshore because there is still the margin for rising taxes on people, who earn over $250,000 a year. Hence, this decision will be affordable for the rich and beneficial for the federal budget and government-sponsored programs.
Furthermore, the decision to increase taxes for the rich brings another advantage since this decision may help the government to cover its social programs and improve the quality of living of the lower-class and middle-class in a way. For example, the government can use revenues from taxes on people making over $250,000 a year to fund Medicaid or public education. As a result, representatives of the lower class will receive health care and social services which they need badly but cannot afford, while the middle class will maintain its position due to the government support of social programs (Elekdag, Justiniano, & Tchakarov, 2006). For example, educators are mainly representatives of the middle class. The government support of public education will secure their jobs and maintain their stable income. Otherwise, they may lose jobs, if public schools cannot afford them. Similarly, health care professionals are predominantly representatives of the middle class but they face the problem of job cuts because of high costs of health care services and the lack of funding. The government support will help to keep those jobs and, therefore, prevent representatives of the middle class from slipping to poverty.
Furthermore, the increase of taxes for the rich will balance social relations within the society and ease the social tension that persists creating favorable conditions for the rise of economic activities because the level of income of the lower class may increase and the middle class will also be certain in the stable future of their position and the US economy. To put it more precisely, representatives of the lower class will obtain the government support and, thus, they will have an opportunity to increase their spending because health care and basic social services will be provided in terms of government-sponsored programs (Latham & Braun, 2008). As a result, the poor can spend their money for their other needs. The increase of income of the population will stimulate spending. At this point, the increase of income for the poor will be backed up by the maintenance of the stable income of the rich because the government using revenues from taxes collected from the rich will be able to ensure the stable position of the middle class. As representatives of the middle class grow certain in their future, they can start spending more. The increase of spending will stimulate the growth of consumption, which, in its turn, will trigger the economic growth and emergence of new business activities. In addition, the government can create new jobs by developing new projects and government programs that will need private contractors to participate in those projects and programs that will also stimulate the rise of business activities and economic growth.
Thus, the rise of taxes on people, who earn over $250,000 a year is the right decision at the moment. The government takes more social responsibilities at the moment. Therefore, the government will need more funds to cover those responsibilities. The rich can afford paying more taxes without the consistent deterioration of their social standing or financial position. Therefore, the government should be able to increase taxes without any harmful effects on the economy. On the contrary, the rise of taxes will increase revenues of the federal budget and will help to fund government-sponsored programs that will stimulate the growth of consumption and business activities.
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