Mr. Jumanji
Abstract Is the U.S. government too involved in its market? Does an increase in taxes, as a result of increased government, effect charitable giving? Research shows that government is creating a system of dependency through entitlements, which causes the impoverished to seek wealth transfers from the government, rather than creating their own wealth. This system of dependency requires heavy taxes on the wealthy individuals in the U.S. in order to fund wealth transfers to financially support the impoverished. This paper examines the effect of a tax increase on charitable giving. An analysis of the effects of a tax increase has shown that individuals retain less income, thus charitable giving drastically decreases due to less consumption and higher savings. The intended solution for today’s government is to lower taxes, restructure the entitlement system, and provide more wealth creating strategies, rather than wealth re-distribution.
Introductory
“[Government] is raising taxes sky high, drastically cutting retirement and health benefits, slashing defense, education, and other critical spending, and borrowing far beyond its capacity to repay."1
Why does a government tax? The purpose of taxes is to fund services, i.e. roads, defense. Taxing also often entails involuntary wealth transfers and re-distributes it to others. Taxes are the government’s income, but not its sole source of funding. Of late, debt has been a prominent part of government financing, with the federal operating deficit close to forty percent of expenditures. The majority of government expenditures go to entitlements, i.e. Medicare, Medicaid, and Social Security. According to Figure 1, fifty-nine percent of federal expenditures are entitlements, i.e. Pensions, Health Care, and Welfare.2
Figure 1
The government tends to re-distribute rather than create wealth. Katherine claims the government runs over 70 means-tested anti-poverty programs in the U.S. that
Introductory
“[Government] is raising taxes sky high, drastically cutting retirement and health benefits, slashing defense, education, and other critical spending, and borrowing far beyond its capacity to repay."1
Why does a government tax? The purpose of taxes is to fund services, i.e. roads, defense. Taxing also often entails involuntary wealth transfers and re-distributes it to others. Taxes are the government’s income, but not its sole source of funding. Of late, debt has been a prominent part of government financing, with the federal operating deficit close to forty percent of expenditures. The majority of government expenditures go to entitlements, i.e. Medicare, Medicaid, and Social Security. According to Figure 1, fifty-nine percent of federal expenditures are entitlements, i.e. Pensions, Health Care, and Welfare.2
Figure 1
The government tends to re-distribute rather than create wealth. Katherine claims the government runs over 70 means-tested anti-poverty programs in the U.S. that