Effect of Taxes on American Social Classes
Effect of Tax on Social Classes in America
“No taxation without representation” was a common protest over two hundred years ago when the then thirteen colonies were still under the rule of England. Since then America has gained its freedom from England, experienced civil war, abolished slavery, fought in two world wars, and a hand full of other conflicts all around the world, all while becoming the most powerful economy in the world accompanied with the most powerful military. With all that has changed in the world, and The United States over the last two centuries, one constant has remained, taxes. As we are fast approaching a presidential election in November of 2012 tax reform appears to remain a very trendy topic. As President Obama recently released his tax returns from 2011 following the release of GOP’s candidate Mitch Romney’s return, reformation of U.S. tax law has resurged to the surface once again, this time not because of lack of representation, but because of the unfair gaps that it is creating in society.
President Obama had an adjusted gross income (AGI) in 2011 of almost $800,000 and paid federal and state income taxes at a tax rate of almost twenty-one percent, while his secretaries AGI was less than $100,000 and her tax rate was closer to twenty-five percent. This is a prime example of the flaws in our tax codes as they are now written. They are currently allowing the richest people in America to pay less percentage in taxes than those that make less money. While one may argue that the monetary amount is obviously larger for those with a higher income, you have to ask is it really fair that the families that need the extra money the most are paying a larger percentage of their annual income to the government every year?
This difference in tax rates is due in large portion to the ability of wealthy Americans to invest their money in the stock market and other long term investment possibilities. Gains on long term investments are only
“No taxation without representation” was a common protest over two hundred years ago when the then thirteen colonies were still under the rule of England. Since then America has gained its freedom from England, experienced civil war, abolished slavery, fought in two world wars, and a hand full of other conflicts all around the world, all while becoming the most powerful economy in the world accompanied with the most powerful military. With all that has changed in the world, and The United States over the last two centuries, one constant has remained, taxes. As we are fast approaching a presidential election in November of 2012 tax reform appears to remain a very trendy topic. As President Obama recently released his tax returns from 2011 following the release of GOP’s candidate Mitch Romney’s return, reformation of U.S. tax law has resurged to the surface once again, this time not because of lack of representation, but because of the unfair gaps that it is creating in society.
President Obama had an adjusted gross income (AGI) in 2011 of almost $800,000 and paid federal and state income taxes at a tax rate of almost twenty-one percent, while his secretaries AGI was less than $100,000 and her tax rate was closer to twenty-five percent. This is a prime example of the flaws in our tax codes as they are now written. They are currently allowing the richest people in America to pay less percentage in taxes than those that make less money. While one may argue that the monetary amount is obviously larger for those with a higher income, you have to ask is it really fair that the families that need the extra money the most are paying a larger percentage of their annual income to the government every year?
This difference in tax rates is due in large portion to the ability of wealthy Americans to invest their money in the stock market and other long term investment possibilities. Gains on long term investments are only