Do Higher Income Taxes Solve The Economic and Social Problems
During the recent presidential debates in Des Moines, Berne Sanders called for increasing the income tax rates for the wealthy. In support to his positions he contrasted himself to Eisenhower administration, during the rule of which the income taxes reached 70% (McLaughlin), by saying he was not “as such of a socialist compared to Eisenhower” (Yoni Appelbaum). Indeed, there is a big gap between wealthy tax rates during Eisenhower presidency and now, while US economy is following the capitalistic way of development which inevitably leads to capital distribution disproportion. Actually, the over the past decade the gap between the rich and poor has increased.
However, the question is, can higher income taxes for the rich really improve social and economic problems of USA?
The answer may not be as obvious as it might appear to be. From a liberal point of view, the task of the government is to provide the decent level of live to all of the citizens and protect their basic rights, such as safety, education, dignity (McLaughlin). Absolute poverty is a violation of a human dignity right, so it is natural that politicians are so concerned with a smoother distribution of capital among the people. The fastest conclusion would be to increase the income taxes for the rich; however, this measure could have dramatically negative impacts in the current conditions of economic globalization. Higher income taxes can discourage investing incentive and, therefore, will lead to weaker economic activity and less employment growth. In the long terms this will mean less tax flows to the government budget and, as result, less resources for social sending.
In the current circumstances of investment market globalization, weaker economies try to attract investors ‘capital by allowing lower tax rates. In this light, Berne Sander’s idea of increasing tax rates for the wealth looks not only ineffective but dangerous for the US economy. On the contrary, the government should think of ways to boost the economy activity rather than re-distribute the capital resources.
McLaughlin, Walter. 'Is Taxing The Rich The Solution To America's Financial Problems?'. Decoded Science. N.p., 2014. Web. 20 Nov. 2015.
Yoni Appelbaum, Kathy Gilsinan. 'Who Won The Democratic Debate?'. The Atlantic. N.p., 2015. Web. 20 Nov. …