Is America’s Tax System Fair? | 5 Minute Video
Is the U.S. tax system fair? Are the rich paying too little or too much? What about the middle and lower class? New York Times bestselling author Amity Shlaes answers these questions, and offers a tax solution that most Americans could get on board with. Donate today to PragerU! http://l.prageru.com/2ylo1Yt
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Script:
Tax the rich some more.
That recommendation comes from many politicians.
It seems obvious to tax the rich. We tell ourselves they won’t miss that little extra bit we take. And after all, it’s only right that they pay their fair share.
The technical name for taxing the rich more is progressivity. And it’s hard to oppose a concept that shares its roots with an optimistic word like progress. But this surface logic obscures some important truths about progressivity. So let’s stand back.
The first thing we see when we take our distance is surprising. It is that many people don’t know what progressivity is.
Suppose you pay five dollars in tax on your income. A rich man pays ten dollars, because he makes twice as much as you. This arrangement sounds like progress, right?
But that is not a progressive tax schedule. It is a proportional one—a true fair share. What was once known as the tithe, but is now commonly called now a flat tax. Under a flat tax, everyone pays the same rate no matter what they earn.
In the 1980’s a poll by political scientist Karlyn Keene suggested that Americans thought flat proportional taxes were fair taxes. And as we know from architecture and art, humans are wired to like proportionality. A progressive tax structure by contrast is actually disproportionate.
Progressivity resembles a flight of stairs. Each individual starts out at the bottom, paying the same rate, say 10 percent. When his income rises to a certain line, the taxpayer moves up a step on the staircase and his rate goes up to, say 20 percent, but only for the share of income past that line. At the next step, the rate goes up again, say to 30 percent, but again only for the last stair of income. And so on.
But the prospect of going up all those stairs tires the climber. Surveying the rates at the top, workers stop chasing a promotion they once thought they wanted. Why bother? The taxman will take the money anyhow. When workers or professionals stall on the stairs, the government loses money, but so do regular people. For when the person who decides not to earn more money is a business owner, the result of that decision is a smaller company and fewer jobs for others.
Of course some people do keep climbing, no matter what. Some people are wired that way. And those taxpayers can get to the point where they pay half of what they earn—especially in high tax states—which leads to the greatest argument against the progressivity staircase: Progressivity is unjust. People have a right to what they earn—even Californians and New Yorkers.
For the complete script, visit https://www.prageru.com/videos/americas-tax-system-fair
source
Americans with kids under 18 and making a certain amount benefit the absolute most from America's tax system.
and they get the lavish child tax credit.
while people like me and my husband get back an average of $300 or LESS from the government.
My husband pays $3000 plus each year in Fed taxes.
We don't get shit crap back.
This is a great video. I have been saying these things for years. Yeah my big beef with the progressivity system is that it does jot work well at well and kind of punishes the people who earn more money through their hard work. It is one of the deadliest positions to merit building
The FAIR TAX is the best and most fair method of raising money for the government. Unfortunately the governments plan is not about raising money to pay for government programs for the benefit of everyone. It is almost entirely about controlling the populace in the direction they deem necessary for THEIR programs. The entire tax code is about control, not government income.
When a country taxes its people excessively, a collapse is inevitable. History teaches us this lesson, but we must also learn from our own actions. Spending excessively leads to self-destruction, whether personally or in relationships. There's no escaping the consequences. YOU DECIDE!
This is such BS. So much cherry picking.
Those that benefit from shared costs the most must pay more. That's fair.
A mega corporation or mega millionaire/billionaires should pay more. Also when displayed the tax brackets you showed them as linear model. A progressive tax system should be built on a non-linear model or just won't work right.
Also if people say "I don't want to earn more because the tax man will just take it then that's fine because it creates opportunities for others. That economic need and activity is still there. What you explain is how we get corporate tyranny.
Prager, again just lying. Nazis.
FairTax Act or bust
Taking from the rich is taking.
In reality we are all losers. Unless we all come together as one 🙃
The democrats want everyone including those above them to be equally poor.
Its almost like the some of the left wing people are enviers, thieves, and hate people who make more than him, this may probably to reality and not just in political opinion. It makes perfect sense.
Some people will hate on and say the narrator supports white privilege.
Democrat politicians will continue to offer "Free stuff" in order to buy votes. This is what Biden proposed so that people who did NOT go to college are forced to pay the loans for people who DID.
Most of you here paid off your college loans. I did.
Sanjosemike (no longer in CA)
I dont quite understand why they say its bad to tax the rich and instead tax the 50% of americans who pay no federal income tax, its been shown that cutting taxes for the richer few increases gdp less then for the poorer few, so it would be worse to have it the way we do.
The thing that a lot of people, especially non-rich people don’t understand is that there’s a income tax not a wealth tax. I’ll bet that bill gates doesn’t have an income over $300K. There will never be a wealth tax because politicians are rich.
The problem is not who's paying the taxes. it is what is it being used for.
This is very one sided.
Todd don’t cover all the tax breaks and loop holes they have.
What is it called when a billionaire brags about paying less in a year than a school teacher? Trump said it is called smart. What is called when a teacher can't deduct supplies for school work but a billionaire can write off a luxury yatch as a business expense? What is it called when a business can avoid millions in taxes because they use a post office box in the Caribbean? What is called when you get rich by being born lucky? So don't give me crocodile tears for the Uber rich.
What about company tax and sales tax? that should be part of the discussion, not just personal income tax. what proportion does that play?
I've always been for a flat tax rate; otherwise you are punishing people for thier success.
I don't really like the sales tax only approarch. Successful people my buy higher priced food, but they don't have too and they don't need to eat more than anyone else. The same applies to where they live and what they drive. Those of us who make less money would still be paying a higher percentage of our income on taxs than they would, so they would only be paying more if they actually bought more expensive items than us. The majority of millionaires, in the U.S., actually live in the same types of neighborhoods as the rest of us. They did't become successful by waisting money in what they don't actually need.
In Communist America (hide behind liberal ignorance group), more taxes = more welfare. But the reality is = more taxes = less economic turnover = less spending = LESS PROFIT MARGIN = MORE UNEMPLOYMENT = MORE POOR PEOPLE!!!!
No….
just one small problem Prager"U", tax on consuption is more heavy proportion wise on the poor, making the top 1% pay little to nothing, and the bottom 50 paying the majority
2 words proving this video wrong:
Liz Truss
Thanks for the video.
9-9-9 was the best tax idea to come along in my lifetime… yet it was laughed off the platform.
9% flat business tax would collect the same that we do now with an elaborate and complex structure but with less cost and greater simplicity.
9% sales tax would address "fair share issues" because the rich are buying more expensive things and paying more taxes…while also finding a way to tax the mass of illegals and blacg market that have flooded the country.
9% flat income tax would finally make the entire country have skin in the game.
this is really a very low quality argument.. and even inconsistent with itself.. at first you (briefly) explain that taxpayers only pay the 50% tax rate on the income in that bracket, however you then go on referencing the 50% rate as if that is the overall rate that rich people pay.. that is obviously flawed..