On Taxing the Wealthy

It’s being called “class warfare”, President Obama’s proposal to raise taxes on America’s wealthy. “Warfare” is a pretty strong word, for a tax increase of only four percent. When I think warfare, I think violence, battlefields and blood, not millionaires with chintzy mansions in the hills, wearing $1,000 suits and paying a measly four-percent more in taxes.
This whole “class warfare” hysteria, is just another example of sensationalism in the media. It’s purpose is to increase ratings, while at the same time persuading the viewer to the networks own political viewpoint.
39.6% is not a large increase, and in fact is not unprecedented. It’s exactly the rate America’s wealthy paid under the Clinton Administration, under which America experienced a large amount of economic growth (Johnson, D).
Historically, America’s wealthy have always paid an even greater amount in taxes. The tax rate on America’s wealthy was 90% under Presidents FDR, Truman, Eisenhower, and the beginning of the Kennedy years. These were the years that America built it’s middle class. Even President Ronald Reagan, who was a great advocator of Trickle-down, taxed the rich at 50%, although this was a lower percentage than what it had been previously (Blue Prevails).
Since the Bush tax cuts, our economy hasn’t been doing so good. I tend to feel, that this is not a coincidence. Trickle-down economics is a nice theory, but it is only a theory and has not had very much success in practice.
A more valid economic theory would be Keynesian. FDR used Keynes theory in his New Deal program, which helped the United States recover from the Great Depression. Keynesian economics is the idea that enough spending can get an economic system going again. It makes sense to me! Anyone in business will tell you, you have to spend money to make money. Keynesian has been proven to work, while trickle-down has not (Whittie, Amy L.).
Further more, with Obama’s plan to raise taxes on the wealthy, he also plans to cut taxes on 95% of working Americans. It seems to make a lot more sense to do something that will benefit 95%, rather than 1%. America’s middle class definitely needs the help more than millionaires. But Fox News and other sensationalist news sources, sometimes forget to mention these things (Blue Prevails).
Cutting taxes on working Americans will help the economy. Everyday Americans will be spending more, and smaller businesses will flourish. As opposed to multi-million dollar corporations, who already have most of their labor overseas anyway.
America’s largest retailer, Wal-Mart, is only able to sell their merchandise at such a low price, because they outsource to low-wage factories overseas ( Freeman, Richard and Arthur Ticknor). They have thousands of factories in countries other than the United States, including Bangladesh, China, Indonesia, Nicaragua, and Swaziland (Greenhouse, S.) They have been using labor overseas for years, and it has worked out for them. They certainly aren’t going to stop and start producing here in the U.S, due to tax cuts. And Wal-Mart is typical of many multi-million dollar corporations in our country. None of them stopped using overseas labor, or created jobs for Americans, after the Bush tax cuts. So, the argument that cutting taxes on the rich produces more jobs, would seem to be false.
The fact is, whenever top taxes are raised our economy grows. Vice Versa when taxes are cut the economy usually declines. Raising top taxes provides our government with the revenue it needs, to improve schools and educate our country’s youth, for military spending and our country’s defense, for maintaining a strong middle class, and so much more! It isn’t class warfare, it’s logic! And it will greatly benefit a large majority of the American people.
The GOP can keep yelling about trickle-down, but the way I see it; It’s much better to do something that will benefit all Americans, than to do something that will only benefit about 1% of Americans. And aren’t we all in this together? We are after all The United States of America.