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Taxes: How Much is Enough?
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Essay by:Jason B. Elkin
Let me start this paper off with a little story. Brian came to the United States from South Africa for economic opportunity in 1984. With economic sanctions being put on his home country’s government, getting out with proper paperwork was complicated, but getting money out was even harder. After finally being stamped through New York’s JKF airport, Brian had a tough time exchanging his rands for dollars, because no one wanted South African money. With difficulty, he got his couple-hundred dollars. Fresh off the airplane, carrying only a suitcase, the clothes on his back, a resume, and the drive to work hard and push upward into America’s working class, his life in America began. Twenty-five years later, this immigrant who came here with almost nothing lives in a suburb of New York with his wife and kids. He is currently paying off a mortgage and a car, works in Manhattan, and chooses to keep on working hard. Every month, the government sends him several bills requiring that he pay a large amount of his income, or what the government thinks he owes them, which then gets redistributed to people and organizations that the government deems fit.
According to the Cato Institute, income taxes were at around thirty-percent under the Bush administration. Under the Obama Administration, taxes are on the rise, and are continuing to do so, with no set rate actually recorded. The president has talked about launching a $503 billion stimulus in the next year or two. I have qualms with this issue. People like Brian bust their chops everyday to make their money and risen up in American society, one hour at a time. Every ounce of effort he puts in eventually translates into money, and it might be above the national average, but it doesn’t happen because he sits around and does nothing. Does a man like Brian deserve to have the government hands in his pockets? Does he deserve to be punished for working hard and making an honest dollar? Who has the right to critique a man like this?
Out of all the policies created by American presidents, my mind always seems to shout out one word—Reaganomics. Call me biased, but I think Reagan was one of the best presidents this country has ever had. Not only were his politics regarding Communism stellar to his predecessor Jimmy Carter, he also made American interests extremely clear in the international community. But what’s most important is how he handled economics during his time in office; keep in mind that this is coming from a guy like me, who is a first-generation American. The basis of Reaganomics states that the government reduces spending, reduces taxes, primarily income tax, reduces government regulation, and regulates money supply within the country. In doing this, citizens would have more spending money, and thus spread their wealth both internally and externally throughout the country. In many ways, this worked in the nineteen-eighties, allowing Americans to live quite prosperously, always willing to spend money. With the ability to spend money, people will be able to have their businesses and firms prosperous, and the more money that is available, the more the economy can expand. The more you spend, the more the government can make off of taxes, because people will have the ability to spend their money. By keeping taxes high, the government is directly taking money from the citizens, and, sooner or later, they will come to understand and resent this fact.
If the government taxes the people in a way that isn’t so direct, then there might be a chance that there won’t be a general-populous-versus-Federal-Government Issue. Because, let’s be honest here, no one likes having the government’s hands in their pockets. The only people who don’t resent taxes are minorities, the overly poor, and rich white Liberals, and even they pay taxes. During the Reagan administration, Americans followed this economic structure, and it was because of this that the economy came very close to being at an all-time high. While, of course, the poor didn’t exactly prosper from this structure of spending and relied heavily on Democratic handouts, it should have encouraged them to work, because the more they worked, the more money they could have made, and the less they would have to give back to the government because taxes were so low. This would allow them to save more, as well as spend more, which would eventually come back to them and their community. During this time, Americans were welcome almost everywhere they travelled, because their host countries understood that they would be willing to spend more money and help boost their economies. Of course, the Welfare Act of 1996 limits the amount of welfare that can be handed out and took baby steps towards eliminating it altogether, but in all honesty, it will never go away; the poor will always need help; it is how much the government gives that we need to worry about.
What’s going on in the present day is actually a lot easier to comprehend than it is made out to be. The economy is suffering from a president that spent far too much money on fighting overseas and trying himself to reduce the deficit. Toxic investments were bought, and, as it happened, burned through money like it was gasoline. Now here we are, still in debt, the new president attempting to tax the living daylights out of those who actually make enough money to get by in a fast-paced lifestyle, in an attempt to help those who have lost everything due to large investment firms’ mistakes that were attempted to be fixed by the government. In 2009, the dollar’s exchange rate is at an all-time low, oil prices are rising, taxes are going up on everything, inflation is rising, and the unemployment rate is at its highest since the Great Depression. The people who are able to spend are very limited as to what they can actually let go, because a lot of their expendable income goes towards paying taxes. Businesses are suffocating, the real estate market, as well as the retail sector of American life, are getting stabbed by the knife of unemployment, and getting a loan nowadays is starting to become harder than finding a Ferrari Enzo for sale. History repeats itself; things weren’t as bad, but were somewhat similar just about the time Reagan took office. The only difference is that Reagan did something to actually change the economic system—he didn’t just promise “change,” and then tax the people who used the capitalist system, like our friend Brian, to their advantage.
Of course, there has to be a trade-off. Americans expect certain services from the government, but they also hate paying taxes. There needs to be some kind of balance between the amount of money that we as Americans can keep, and what the government is allowed to take in order to support this society’s infrastructure. Instead of increasing the income tax, why not lower it, if not eliminate it altogether? But wait, how will the government make any money? Instead of directly taking money out of everyone’s pockets, the best way to go about doing this is to add taxes onto everything that we buy. Whether its food or a car, the taxes will go up. This way, people will be able to keep their money, but the government will still be able to have a steady stream of money coming their way. They could also cut international aid by a very small percentage and put that towards our domestic issues. This way, everyone will be happy.
»A new report finds the main problem in getting the public to deal with our fiscal problems isn't opposition to tax increases or spending cuts -- it's their lack of trust in the government to spend their money wisely.