Tax the rich, save the poor

Chris Kok

Democracy is about equality of power. In capitalism, money is the main form of power. Large wealth inequality in this country is a force that is weakening our democracy.

Those with wealth have the ability to hire lobbyists and to donate large amounts of money to political parties. The result of this is the wealthy have more power in America than the average person. What presidential candidate could you vote for in the 2004 election who wasn’t a billionaire? Even Nader, who wasn’t on the ballot, is a millionaire.

For there to be true political equality, a necessary factor of democracy, there must be more wealth equality. Two ways to achieve a greater wealth equality are social programs and progressive taxes. Social programs such as welfare, health care and education will lead to lessened wealth inequalities, but these cost money. To pay for these programs taxes will be necessary.

There are several ways taxes can be formulated, including sales tax, flat tax, progressive tax and capital gains tax.

A sales tax is inherently regressive; the poor will pay a higher percentage than the rich. The rich and poor might consume similar quantities of gas, leading them to pay similar dollar amounts of gas taxes, but the poor will pay a higher percentage of their income on the gas tax.

A flat tax taxes everyone at an equal percentage. This sounds like a fair and equal way to tax people, but look at the effect that the tax has on different classes of people. While someone making $400,000 a year will hardly notice the tax, someone making $400 a month needs all of that money just to survive. People should be taxed based on their ability to pay the tax.

A progressive tax taxes people at an increasing rate as their incomes rise. During the Great Depression and World War II, the top income tax level was 91 percent; now it is only 35 percent. Congress should increase the top income tax level.

Also, Congress should close loopholes in tax laws. Many rich people can afford to hire accountants who find ways to decrease their taxable income by considerable amounts. If these tax loopholes are closed, the rich will be taxed to the true extent of their income. Another part of the tax code that should be reformed is the capital gains tax. Capital gains taxes tax the profit from the sale of capital such as stocks, bonds and real estate. Under the Bush administration, the top rate for capital gains taxes has dropped to 15 percent. This tax cut primarily benefits the rich. The rich own massive amounts of stock while the poor own a comparatively insignificant amount. The capital gains tax should be increased.

Some of the rich will claim that progressive taxes are unfair. They will say it is not their responsibility to care for the poor, and besides, they really need that extra yacht. When people have a hard time affording food, screw the yacht. Democracy is weakened by wealth inequalities. Instituting a progressive tax system will not only strengthen democracy, but also help alleviate poverty.

Chris Kok is a senior international relations major and point/counter point columnist for the Daily Kent Stater. Contact him at [email protected]