Is a Wealth Tax Just?

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via Max Pixel

Having a wealth tax in general is beneficial to the economy

Taxes have formed the base of America, as the number one way the government gets money. The compulsory contribution to state revenue has faced various controversies over the years, but all in all, taxes are needed in order to pay for the development of our country. Having a wealth tax would mean having a progressive system where the wealthier one is, the higher the tax rate.

First, a wealth tax would provide more equality. For decades, the wealthy have had more of an advantage over the middle and lower classes and continued to thrive while the lower classes continued to fall deeper into poverty. Having a wealth tax would make sure that each class has a proportional share and contribution to the economy. If the upper classes and lower classes are paying the same amount, the wealthy will continue to get wealthier, while those in poverty have to spare a bigger portion of their net worth. The top 0.1 percent of US households have dramatically increased their wealth share from 7 to 20 percent, while the bottom 90 percent have seen their wealth share plummet to 25 percent since the 1970s. This inequality leads to economic distortions, and in only a matter of time, the bottom 90 percent will continue to de-escalate farther into the only financial situation they’ve ever known, which will invoke an ultimate case of bankruptcy in the US. The assets of well-off households will continue to soar, and even though it is not bad to gain money, this sort of inequality creates injustices to people in tough spots.

A wealth tax would also provide effectiveness. US governments still need some sort of revenue from someone who is able to provide it, and having the wealth tax would do just the job. This tool will allow the rise of revenue exclusively from the wealthy and would do nothing but benefit the economy. Since these households are already thriving, just contributing a tax proportionate to their wealth as someone else in a lower class wouldn’t hurt the wealthy as it wouldn’t hurt those in poverty. Right now, one with little savings and the tycoon with a “stockpile of luxury assets” are both paying the same federal income taxes. This is just on their yearly earnings. But, with a wealth tax, the tycoon would contribute an additional sum because of the billions they are making, while one with little savings would not.

Overall, a wealth tax would fix many problems in the US. A regular tax code allows the wealthy to hoard their money as they watch those in poverty fall deeper down that hole. To have equality and effectiveness in our economic system and national benefit, a wealth tax is the way to go.