Federal Taxation



Federal Taxation

Opponents of the current U.S. income tax code argue that it discourages economic growth by unduly burdening high-income earners. There simply aren't enough rich people to tax to effectively cut the deficit, they argue, and raising their taxes won't solve the problem (Reynolds, 2011). "The trouble with depending on so few people for so much government is that it doesn't work when the party stops," Alan Reynolds of the libertarian think tank the Cato Institute wrote in U.S. News & World Report in 2011. "We're running out of rich people to tax," Reynolds adds, noting that the current economic downturn cannot be fixed "by taxing the few surviving millionaires into oblivion (Coburn, 2012)."

Lowering taxes on the wealthy would improve the economy dramatically, opponents of the current U.S. tax code argue. An ideal tax code would allow the wealthy to keep as much money as possible, they contend, which they could in turn use to make investments, start businesses, and take the kinds of smart financial risks that build and strengthen the economy. Instead, critics argue, the wealthy are forced to turn over huge portions of their earnings to the federal government (Draut, 2011). As Republican presidential contender Mitt Romney told Businessweek during the campaign in 2012, raising taxes on the wealthy "will kill job creation in this country to some degree."

The idea that the wealthy are not paying high enough taxes, opponents argue, is a cynical myth propagated by politicians who intend to further their own careers by stoking the flames of class warfare (Rubin, 2012). "Why do liberals work so hard to create the perception that 'taxing the rich' will solve our problems?" wrote Senator Tom Coburn (R, Oklahoma) in 2012 (Forbes, 2013).

Because it's all about the politicians. Liberals believe that inflaming class envy will persuade the ...