Assignment 4: Persuasive Paper Part 2: Solution and Advantages
The issue of tax alteration has presented significant debate especially among scholars and policymakers alike. On one hand, individuals argue that altering taxes in order to charge a higher rate for persons earning over $ 250000 is beneficial to the overall economy. This is because it offers a substantial platform for minimizing the considerable gap of economic equality between the wealthy and the underprivileged. On the other hand, opponents do not want higher taxes to be levied against such persons since it may have an overriding effect that may actually to the fall of the economy. In theory, both arguments are precise and drive a substantial point regarding this pertinent issue. Nevertheless, it is also imperative to view the rationality of both arguments as well as the standard taxation practices among other countries in order to understand the viable argument between the two. A probable solution based on both arguments involves taxing persons earning over $ 250000 for the common good.
Explication of the Solution
Indeed, establishing higher levies for individuals earning more than $ 250000 is significant for both the wealthy and underprivileged. For some, doing that only hinders investment by the rich therefore, slowing down the ascent of the economy. At some point, this argument is inadequate. Accordingly, the sole objective of tax alteration, such as this particular example, is to ensure a form of balance between high and low earners (Bartels, 2005). Establishing different tax rates for different income-earning groups is considerably vital since it allows each group to exercise their resources effectively. Furthermore, by decreasing the fissure between these two groups, both parties are able to increase their spending and investment patterns. At one point, it will be highly restrictive for the owners of resources to exploit low-income earners by offering them low wages.
Instituting the discussed alteration of tax presents viable advantages for the general population. The first advantage rests entirely on the positive implication it poses for the economy. Indeed, implementing this solution will create large opportunities for low-income earners to have the capability of investing significantly in financial instruments such as Treasury Bills and Bonds. In addition to this, high taxation for the wealthy will also result in effective economic indicators such as rapid job growth, higher wages and increases in employment. This is according to the American economy in the 1990s when Bill Clinton introduced taxation for persons receiving higher earnings (Berlin, 2011). During this period, the economy experienced a rather fast growth regardless of the slashed tax cuts in 1981. A similar solution has also undergone implementation in Germany in which income distribution is equal due to the establishment of higher taxes for the nation’s wealthy.
Imposing higher levies on the wealthy also has a rather better equitable advantage among the country’s population. Based on the Marx’s conflict theory, much of the deviance that is evident in the society is a result of the inequality between the owners of production (bourgeoisie) and the wage earners (proletariat). The inequality amidst both parties is a result of the struggle of resources, which the bourgeoisie have a higher chance to attain. In addition to this, these owners further utilize their advantage to exploit wage earners hence resulting into a further gap in terms of income between both individuals (Peters & Fisher, 2004). Nonetheless, in the contemporary era, taxing the wealthy using higher rates may offer fairness for each group, especially those under exploitation. For the low-income earners, such a solution may be entirely fair among them since it will provide with enough incentive to augment their purchasing power. On the short term though, the wealthy will feel that the move is not equitable enough (Slemrod, 2000; Larson, 2003).
Thirdly, the solution proposed provides ethical importance for both high-income and low-income earners. Usually, every matter concerning the issue of monetary instruments mainly focuses on the profits that a party stands to gain without observing the mores that may actually be flouted in the process. Taxation, even though very significant for the fiscal needs of the economy, also requires a considerable observation of ethical practices. Indeed, it is imperative to consider the implications that a certain action may impose. In this case, refusing to tax the wealthy will work against the common good since it will only continue further inequality among the people due to factors such as unfair income distribution (Miller & Benjamin, 2012). In addition to this, the more ethical approach would be to cater for the needs of the public hence the importance of the proposed solution.
In conclusion, the appropriate viable solution concerning the debate on tax alteration is establishing such modifications on persons receiving over $ 250000. Taxing the wealthy at higher rates in comparison to low-income earners is significant since it imposes different advantages, which are best for the overall economy. Foremost, it will reduce the economic inequality between the wealthy and the underprivileged by ensuring fairness in income distribution. Secondly, it will also ensure equality between both groups based on the economic implication it poses. Lastly, it is founded on utilitarianism and thus, will be based on an ethical underpinning.
Bartels, M. L. (2005). Homer gets a tax cut: Inequality and public policy in the American mind. Perspectives on Politics, (1), 15-31.
Berlin, L. (2011, August 24). Why taxing the rich is good for America. The Daily Finance. Retrieved from http://www.dailyfinance.com/2011/08/24/why-taxing-the-rich-is-good-for-america/.
Larson, S. J. (2003). Tax cuts: Issues and analyses. Hauppauge, NY: Nova Publishers
Miller, R. L. R., & Benjamin, D. K. (2012). The economics of macro issues. Boston, MA: Pearson.
Peters, A., & Fisher, P. (2004). The failures of economic development. Journal of the American Planning Association, 70 (1), 27-37.
Slemrod, J. (2000). Does Atlas shrug?: The economic consequences of taxing the rich. Harvard, MA: Harvard University Press.
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