Is America’s Tax System Fair?|5 Minute Video
Is the U.S. tax system fair? Are the rich paying too little or excessive? What about the middle and lower class? New york city Times bestselling author Amity Shlaes addresses these concerns, and offers a tax service that many Americans could get on board with. Donate today to PragerU! http://l.prageru.com/2ylo1Yt
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Script:
Tax the abundant some more.
That recommendation comes from lots of politicians.
It seems apparent to tax the abundant. We tell ourselves they will not miss out on that little additional bit we take. And after all, it’s just ideal that they pay their reasonable share.
The trade name for taxing the rich more is progressivity. And it’s tough to oppose a principle that shares its roots with a positive word like development. However this surface reasoning obscures some essential truths about progressivity. So let’s stand back.
The first thing we see when we take our range is surprising. It is that many individuals do not understand what progressivity is.
Expect you pay 5 dollars in tax on your income. An abundant male pays 10 dollars, since he makes twice as much as you. This arrangement sounds like development, right?
What was once understood as the tithe, however is now frequently called now a flat tax. Under a flat tax, everyone pays the very same rate no matter what they earn.
In the 1980’s a survey by political scientist Karlyn Keene recommended that Americans believed flat proportional taxes were reasonable taxes. And as we know from architecture and art, people are wired to like proportionality. A progressive tax structure by contrast is really disproportionate.
Progressivity looks like a flight of stairs. Each specific starts at the bottom, paying the exact same rate, state 10 percent. When his earnings increases to a specific line, the taxpayer moves up an action on the staircase and his rate goes up to, state 20 percent, but only for the share of earnings past that line. At the next action, the rate increases again, state to 30 percent, but once again only for the last stair of income. And so on.
The prospect of going up all those stairs tires the climber. Surveying the rates at the top, employees stop going after a promo they once thought they desired. Why bother? The taxman will take the money anyhow. When employees or professionals stall on the stairs, the federal government loses cash, however so do routine people. For when the individual who decides not to earn more money is an entrepreneur, the outcome of that decision is a smaller company and less jobs for others.
Naturally some individuals do keep climbing, no matter what. Some individuals are wired that way. And those taxpayers can get to the point where they pay half of what they earn– particularly in high tax states– which causes the greatest argument versus the progressivity staircase: Progressivity is unfair. Individuals have a right to what they make– even Californians and New Yorkers.
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source
Is America’s Tax System Fair? Is the U.S. tax system reasonable? Under a flat tax, everybody pays the very same rate no matter what they earn.
In the 1980’s a poll by political scientist Karlyn Keene recommended that Americans thought flat proportional taxes were reasonable taxes. And those taxpayers can get to the point where they pay half of what they make– especially in high tax states– which leads to the greatest argument against the progressivity staircase: Progressivity is unjust.