What if rather than focusing on more or less taxation overall in our U.S economy, instead we have an alternative tax plan with a bit of both?….
As I have mentioned in one of my previous articles, there are many problems with our current United States economy. That article also mentioned how our economy may not be heading in the best direction, in the near and distant future. I mentioned all the problems, ranging from the massive inequality, to the corruption and greed going on, as well as an assortment of other problems, other than a few positives like a long-term upwards trend on standard of living. I believe that a major potential fix for our economy could potentially be an alternative tax system, unlike the majority of tax plans of many other countries throughout the world.
I think both Conservatives and Liberals alike can agree that Republicans overall want a decrease in taxation, and Democrats want an overall increase in taxation on everyone. That is a major problem. Both have pro’s and con’s, but it shouldn’t just be fully one or the other.
With a decrease in taxes, though you could potentially get more consumerism, and (with assuming a decrease on everyone’s taxes including the middle class), you could get a middle class that could potentially be able to save more, send their kids to college, etc. On the other hand, the government would have less money to spend that would benefit different groups of people such as the middle class and poor with welfare, public assistance, cheaper tuition, etc. In the United States, the percentage of the GDP being from the government is already very low compared to other countries, particularly in Europe.
Now with an overall in increase in taxes, you could in return have a bigger government that could make our society better with infrastructure and better education, and many other things. It could even involve paying off more of the national debt. Also, a higher taxation on the wealthy could really help redistribute the wealth and fix the major problem of inequality. However, the downside is this could hurt some of those with lower to middle incomes, considering many are already just breaking even, and don’t have much money to consume. Though many could potentially get this back with a variety of government programs, whats the point if its already taken from their own paychecks? Also think of the costs of transitioning the money from those people to the government and back into government services.
What if rather than having a tax plan that heavily taxes more or less on everyone in general, we have one that is rather, really progressive, but with big cuts to taxes with the middle class, and virtually no taxes for the poor (or at least very little.)
In simple terms…. this would be something like a huge decrease in taxes for those in the lower income quartile. A good decrease for the middle class in taxes, as well as more tax deductions in general. Then about the same taxes for the upper-middle incomers. Finally, a big increase for upper-incomers, and a super tax increase for the super wealthy.
So why have a taxation plan so progressive yet with so much cuts for a good amount of the population? Well the top 1 percent of our countries wealth, as well as the top 5% own a tremendous portion of the country’s wealth. Basically, as you get to a higher and higher percentile in income, you end up owning more and more of a stake in the wealth distribution. If we focus just on taxing mostly from the wealthy, you may possibly end up with more taxes than before, despite big taxes from everyone else, this is simply because the small percentage of the population that holds the majority of the wealth, holds such a large amount of money that can be taxed and more evenly distributed! The tax cuts from the middle class and poor can be beneficial on the other hand to the wealthy, because of the more consumerism that will result in them being better off. This will really help more spending in our economy and better profits for businesses, which results in more money for the wealthy in a sense. Think of rather than a ‘trickledown theory’ a ‘trickle up theory!’
Below is a rough idea of what I would believe to be a good alternative tax system, rather than just an increase or decrease in taxes overall! I call it the ‘Dwyer Ideal Tax Bracket’, named after me. (Something to keep in mind though, this is what I think each incomer should be taxed at, at the end of the day, not at what each dollar at each income bracket should be taxed at, like in the actual tax plan. However I do believe it should continue to be taxed on per dollar, rather than instantly change on each income amount.)
This is certainly quite different then our current tax plan and many tax plans throughout the world, especially considering how progressive it is. Though this might sound like a good plan, it is yet another problem to close up the loopholes in the first place that many of the ultra-wealthy take advantage of! If you are interested in reading more about my idea’s behind this tax system, as well as other economic insights in general from a teenager, read more from my blog, or wait for the book that I am close to finish writing to come out. It is about growing our economy! Stay put!…