Should Taxes Penalize the Rich?

The Progressive tax is an unstable tax system that is hard to trust because it can easily be manipulated by the people who have the power to change it and can prevent us relieving our debt fater. 

SOURCE: http://media.caspianpublishing.co.uk/

In an article from Money News, a website with advice from many financial advisors/journ titled "Steve Forbes: Flat Tax is Best Economic Fix", Steve Forbes gives his opinion and reasoning on why the flat tax is better than the progressive tax.

"The $200,000-to-$250,000 a year incomes President Barack Obama considers “rich” occur during a couple’s peak earning years, says Forbes, making increasing taxes on salaries unfair."

I agree with this statement because I personally believe that the way that Obama increases the taxes of people whom he may consider to be more successful is what is unfair. He may think that he is like a modern “robin hood”, taking from the rich and giving to the poor when in actuality, it is almost as if he is breaking the law and stealing. If we were to implement a flat tax, the tax system would finally be considered fair. It is not the people who are successfuls' fault that there are people who are in the lower class. They can still help the lower class, but it is not their duty to give away their money to them. Implementing a flat tax would not only be fair, but would also help the U.S. get out of debt in a shorter period of time. This passage captures the meaning of the article because it is a perfect summary of the article and is the best argument against progressive tax and for why the flat tax is better.

"Raising taxes on dividends, which Buffett implies we should do, destroys capital,” Forbes says. “And raising the tax on capital gains, where there is no certainty, as the market’s always reminding us, reduces risk-taking, which hurts enterprises for the future."

I agree with this statement because it is true that raising taxes on capital gains cause people with up and coming businesses to take less risks. Entrepreneurs will be too afraid to introduce new business because they are afraid of what they will be taxed on from their capital gain. If an entrepreneur were to start a business, that they had to put a lot of their own personal money into, that was not successful and did not make a lot of money, the tax system would take away some of what little they made. The tax on capital gain causes people to not make as much as they originally wanted or expected to get. The current tax on capital gain pretty much cheaps out the seller for their full amount of money they deserved. The flat tax could eliminate the tax on capital gain for individuals and decrease the tax amount on capital gains for businesses.

Discussion Question: In my next blog post, I plan on researching: how does the Progressive Tax compare to the Flat Tax?

http://www.moneynews.com/StreetTalk/Forbes-Flat-Tax-Economic/2011/09/20/id/411607/