With President Obama continuing to call for those making over $250,000 to pay their fair share of taxes, class warfare is heating up just in time for the election. The issue I have with singling out a specific group is that we are all in this together. Yes, the rich are paying a lower tax rate now than they were 30 years ago. But they are still paying all of the taxes they are supposed to. I’m in the 25% tax bracket. After taking into account deductions and credits last year I paid 10% in tax. Am I a bad guy for not paying my fair share? I didn’t do anything wrong. I took advantage of all of the deductions I could. Many others end up paying zero in taxes but have taxable income. Are they bad people?
Politicians and the media are making it sound like the 1% are swimming in their vaults of money like Scrooge McDuck. I haven’t seen any new vaults being built up recently, nor have I heard of any money swimming related injuries either. This group still pays taxes. I guess just not as enough as some people would like.
There has always been inequality when it comes to income. Throughout history you had the King and Queen with all of the money. Everyone else were peasants. At least now a greater percentage of the population has wealth and the rest have the opportunity for creating wealth. Back then, if you weren’t born into royalty, you were unable to move up in class.
I think that last sentence is where the issue really lies. Even today, many do not feel that they have the opportunity to create wealth. But they do. They just don’t want to make the sacrifices in order to attain it. Unless you are born into wealth, you have to find a way to make it. Bill Gates didn’t become rich overnight. It took him years to build his company. It took him many hours of hard work to get Microsoft to where it is today.
But we only see Bill Gates now. Current athletes can be seen the same way. We see them play football on Sunday. What a job that is! Practice a few days a week and play a game on Sunday. What a life! But we don’t see them during the offseason when they are in the gym eight hours a day, or how they gave up their entire summers while growing up to go to football camps to get better. Most of us can’t even get to the gym for an hour per day on a regular basis. Imagine if your job depended on it. They study film and learn new plays. It isn’t as glamorous as we make it out to be. It’s hard work.
The answer isn’t taxing those that work hard and earned a higher salary more. It isn’t taking that money and giving to the poor so that they can better themselves. Sadly they won’t use the money to better themselves. They will simply buy an iPhone or a new car, something that will saddle them with monthly payments for years. It’s not their fault, they don’t know any better.
The answer is revising the tax code so that everyone does pay their fair share. Take away the loopholes and the complexity around the current tax code. You shouldn’t be punished for making more than then next person, and the next person shouldn’t be rewarded for working less hard that the next person. Everyone has to pay their fair share.
Here are some of my ideas:
- The rich don’t need the ability to deduct the interest from their mortgages on their taxes.
- Charity is a good thing and we should continue to allow this deduction regardless of income.
If the goal is get people out of poverty, then we should be encouraging them to do so. The current system does the opposite: it encourages them to remain in poverty. We should give incentives that encourage people to work more. One idea is to provide free education classes on personal finance. Once they complete the courses, they get a certificate that they show to their employer who will then give them a raise. This way, they learn about how to handle their finances and get a raise to hopefully start an emergency fund.
Maybe at the time of completion of these courses, they open an IRA account and get a bonus of $500 to start them off. There could also more continuing education courses as well that get more complex. As these classes are completed, they could receive additional bonuses to their IRA account.
I know my ideas are out there, just like they are with my idea to create jobs and increase worker pay. But I think we need to start thinking outside the box. Throw everything on the table and go from there. After all, what we have now really isn’t working anymore.