Generating tax revenue is an integral part of keeping society running smoothly for citizens who regularly depend on public services, the transportation, or the educational system. Federal, local, social security, and sales taxes all consume over 20% annual income of middle class citizens. This same group of taxes only consume about 8-9% income of upper-class households.
Tax Breaks Often Benefit the Rich
Subsidies granted from special deductions, exemptions, and exclusions often benefit the upper percentiles of American taxpayers. Lower-income households pay a much higher tax percentage in combined taxes than those in richer households. Tax deductions which favor the top percentile include mortgage interest, estate exclusions, and capital gains. Each of these deductions is more likely to be utilized by the upper-class than any other group.
The Argument for Equal Percentage
The American public argues that the percentage of taxes for each bracket should be equivalent, and that the amount of money paid is not what’s in question. The loopholes and tax breaks that benefit the upper percentiles of Americans help to create an economic gap. This gap between the upper and middle class creates a struggle for power between citizens. Many think that an equal percentage affordable for all tax brackets across the board could be beneficial to society.
Final Thoughts
When contemplating the wealth gap and differences in privilege, many upper-class citizens attribute success to smart investing, hard work, and long-term saving. They believe that anyone can become wealthy if they work hard, even though they are usually portrayed as the problem rather than the solution. However, an increase in tax revenue for the federal government is needed now more than ever, and so there is a feeling that the rich should be called upon for the increase. However, extracting more tax money from the rich could have negative consequences. More debate is required in order for the proper solution to be identified.
Image credit: Darya Mead