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Speak Out
Should the federal government raise taxes on the wealthy?
 By John Vettese, Student Voices staff writer
Fairness of taxes is a key principle of our country, going all the way back to colonial days.
When the colonists rebelled against Britain, their rallying cry was “No taxation without representation.” The colonies were taxed by Britain but did not have representatives in Parliament, so they broke free to form the United States of America.
The colonists were not anti-tax – they just wanted a say in government and how their taxes would be spent. They wanted to be taxed equitably and tried to implement a just system in their fledgling nation. Article I, Section 8 in the Constitution gives Congress the power to set taxes to raise federal revenue. Initially, individual states collected taxes on goods, services and property as the nation grew, and the federal government collected money from those states based on population. (For example, if Delaware made up 4 percent of the U.S. population, the state paid a 4 percent share of the total federal tax.)
But what if more wealthy individuals lived in Delaware than anywhere else? The state may be paying its fair share based on population numbers, but the individuals might not be paying their share based on income. The 16th Amendment to the Constitution, ratified in 1913, changed this, allowing the federal government to collect taxes directly from individuals.
Flash forward to today. The country has been mired in bad economy for almost a decade, and its leaders are struggling to find ways to cover its perennial budget shortfalls. President George W. Bush gave tax breaks to the wealthiest individuals, reasoning that they would put money toward spending and investment, and could kick-start the economy.
President Barack Obama is taking the opposite approach. This month, he announced plans to bring down the debt by raising taxes on the wealthy. According to a report in the Washington Post, this would include a special new tax for millionaires while removing loopholes and deductions they might use to get out of paying as much in taxes. The president says his plan will bring in $1.5 trillion in new revenue and save $3 trillion over a decade while eliminating what he saw as unfairness under the Bush tax plan.
In a speech at the White House, Obama said that the previous tax structure required middle-class families to pay a higher percentage of their income in taxes than millionaires. “Explain why somebody who’s making $50 million a year in the financial markets should be paying 15 percent on their taxes when a teacher making $50,000 a year is paying more than that, paying a higher rate,” he said. (The Associated Press disputes the president’s assertion, reporting that IRS figures show that the average middle-class American pays a significantly lower tax rate than wealthy.)
But critics disagree. Rep. Eric Cantor told the Christian Science Monitor that Bush’s tax cuts created jobs, which are “what is needed right now to get an economy going again. When you raise taxes on capital, you impact workers. We are all in this together.”
Others didn’t like the idea of a tax law deciding who is wealthy and who isn’t, when it isn’t always that straightforward.
“It depends on what people are facing,” Sen. John Rockefeller of West Virginia told the Monitor. “$250,000 isn’t enough to cover college costs, so rich may be $500,000 or $1 million.”
“Fairness is in the eye of the beholder,” Sen. Ben Nelson of Nebraska told the Monitor. “People want shared sacrifice. What’s rich in some places is not rich in others.”
What do you think?
Should the federal government raise taxes on the wealthy? Should millionaires and billionaires pay less, so they have more money to invest? Should middle-class workers pay a higher percentage of their income to taxes than the wealthy? Join the discussion!
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