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The saying goes that nothing is certain in life except death and taxes. Although paying taxes can be painful, it’s necessary; however, not everyone pays what they should. Here are a few insights on what the U.S. economy could look like if the ultra-wealthy paid more taxes.
We’re not against any class, nor do we expect one to take most of the tax burden. However, many argue that the ultra-wealthy pay the lowest taxes while the lower and middle classes bear the burden.
According to a White House study, on average, the wealthy pay 8% in federal taxes compared to the 13% the average American pays. How does this happen?
Many wealthy individuals build their wealth through stocks and dividends. For example, most people get taxed immediately upon receiving their paycheck.
However, the wealthy who have their money in stocks get taxed at a lower rate. Can more money solve many of the problems in the U.S.? Some argue yes.
Currently, the U.S. is about $34 trillion in debt.
According to some millionaires, adding a 2% tax for people with a net wealth of $5–49 million, 3% for those with $50–999 million, and 5% for those with $1 billion or more would help raise more than $583 billion annually and help tackle the $34 trillion U.S. debt. Two hundred millionaires signed a letter aiming to tax the “ultra-rich.”
The wealthiest 1% of Americans have seen their income grow 19 times faster than the bottom half in the past decade. However, individuals aren’t the only ones paying less in taxes; corporations have experienced a dip.
For example, the amount paid by corporations after tax breaks went from 16% to 9% in 2018. Ultimately, there appears to be inequality in the percentage the wealthy pay in taxes compared to average individuals.
Not only does this make it hard to build financial security for average Americans, but it widens the gap between the wealthy. However, would giving more money to the government cure the debt problem, or would it continue?
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