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Wealth is Not Immoral: The Argument Against Excessive Taxation

by Morgan Jacobsen

As of late, American politics have once again been plagued by disagreement regarding taxation. Our current system of taxation in the United States is primarily progressive. This means that depending on your gross income, you are taxed at a different rate. Additionally, top earners are not taxed at the top rate for the entirety of their income. Under the Trump administration, tax cuts have been passed, primarily reducing the tax burden on the highest earners from 39% to 34%. While such tax deductions have resulted in an increased national deficit they have also resulted in a strong, growing national economy and reduced unemployment across the board. While some assert that a rise in taxes for top earners up to 70% is necessary to expand social welfare programs, such a tax increase would severely damage the national economy and yet still would not be enough income to support such programs.

Many prominent figures in the ever radicalizing Democratic Party propose severely heightened taxation on the wealthy (including but not limited to Bernie Sanders, Kamala Harris, Nancy Pelosi, and Alexandria Ocasio-Cortez) in order to provide funding for programs such as Healthcare for All and the Green New Deal. Such figures who have labeled themselves “Democratic Socialists” (a paradox in itself) wish to increase taxes on the rich in order to create their own brand of “Nordic Socialism” in America. While taxing the rich at exorbitant rates to achieve such programs may seem egalitarian, in actuality the massive redistribution of income is contrary to the founding tenets of our country: individualism, personal responsibility, and the ability to acquire wealth, happiness, and property. Some assert that those who oppose taxing the rich less are doing it out of irrationality, hoping that they will one day become wealthy and benefit from the lower taxes. In reality, a lower rate of taxation on the rich further motivates individuals to innovate and produce. Individuals who are wealthy will not be motivated to continue to invest, create, and stimulate the economy with the knowledge that every dollar over 10 million dollars will be taxed at a 70% rate. Individuals who would otherwise be investing and further stimulating the economy will not be able to do so to the same extent. At the end of the day who knows how to spend your money better, you or the government? Does the government have the ability to stimulate the economy better than investors? And most importantly, should the government have that right? At what point does excessive taxation erode one’s freedom to acquire wealth in the United States? The most robust and prosperous world economy was built on the tenets of individualism.

While we are discussing excessive taxation, let's also discuss what prominent politicians think should be done with the funds. Figures within the Democratic Party have recently asserted our need for social welfare programs similar to those in Nordic countries. Such pseudo-socialism would not be successful in the United States for a myriad of reasons. The small homogenous populations of Nordic countries coupled with their vast natural resources and high taxes across the board facilitate their social welfare programs. While American politicians perpetuate the idea that simply taxing the very rich at a 70% level will allow us to pay for such programs, Sweden’s lowest tax bracket is taxed at a rate of 32%. Programs such as Healthcare for All, College for All, or the Green New Deal would require a massive tax increase on all citizens. It should also be noted that the current “Nordic Socialism” is not achieved through actual socialism. Countries such as Sweden, Norway, Finland, Iceland, and Denmark, rank as some of the most capitalist nations in the world. Massive taxation in the United States would result in the collapse of our economy, therefore stifling the world economy, and would ironically result in the breakdown of Nordic Socialism as such countries would no longer be able to piggyback on the prosperity of a strong world economy facilitated by the United States.

In summation, wealth is not immoral. You are not inherently entitled to someone else’s money just because you need it more. Massive income redistribution will not solve all our problems. The economic success of the United States was not built on socialist values. Massive taxation on the most productive members of the economy will not increase standards of living over time. The programs proposed by those who wish to increase taxes on the rich would not be sustainable without massive tax increases on all citizens. And to finally dispel the myth, the rich in the United States have never paid a 70% tax rate, it was an effective 40% tax rate due to massive loopholes and exemptions. Governments were created to collect taxes, but not to the extent as would stifle the economy and decrease standards of living over time as a result of lack of innovation.

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