Our tax dollars help fund public services, such as roads, education, transportation and health care. Yet, the cost of healthcare and other necessities continue to grow and many people struggle to afford it. With the United States’ growing population and economy, there is high demand for effective public services, but tax revenue is unfortunately not enough to cover it. To increase tax revenue, the U.S. should look to tax the rich more than the working class.
The wealthy elite—including millionaires, billionaires and CEOs of well-known companies like Facebook, Microsoft, Amazon and Walmart—are making more money than the entire working class combined. Most of the funds that make up the tax revenue are coming from the working class; the same people who are making the majority of contributions to our economy.
For instance, CEO pay is up 2.8 percent from 2012 and 21.7 percent since 2010, while their pay has increased about 937 percent since 1978. CEO earnings have been increasing dramatically since 1978 while compensation for the typical worker has only grown by 10.2 percent in that time.
CEOs, however, are still paying proportionally less in taxes than the working class. This is unfair because, while the working class isn’t earning as much money as the upper class, they are paying a proportionally higher percentage of their salaries to taxes. The richest 1 percent paid an effective federal income tax rate of 24.7 percent in 2014 while someone making an average of $75,000 is paying a 19.7 percent rate, according to Americans for Tax Fairness. Essentially, due to the negligence of the upper class, the working class must pay higher taxes.
As the Boomer generation begins to retire, their earnings and spending will likely decrease. This suggests that an aging population could reduce government revenue, particularly from sales taxes and individual income taxes, according to Vice President and Denver Branch executive at the Federal Reserve Bank of Kansas City Alison Felix.
According to Sociology Professor G. William Domhoff from University of California at Santa Cruz, the richest 1 percent of Americans own about 35 percent of the nation’s wealth. To relate this back to public services, imagine the healthcare funding the country could allot with that amount of money.
Overall, the rich should be taxed relatively more because they are earning more compared to an average wage worker. This will also ensure citizens of all classes are equally contributing to and benefitting from our nation.
Brandy Manasilp is a communication major freshman who enjoys reading novels.