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Tristan McConnaughy Ms. McClung College Prep English 4 7 March, 2014 Economic Benefits of Raising Taxes on the Wealthy Taxes should be raised for the rich because they make ridiculous amounts of money and are hardly being taxed on any of it, and if the taxes were raised for them the United States would have enough money to pay off the deficit the country is in. The economic benefits of raising the taxes for the super rich would be a tremendous help for the United States since the poor and middle class do not make enough money as a whole to cover what the rich people can and should be paying for. The rich people need to pay quite a bit more in taxes since over the past couple decades the country has had quite the spending deficit. Then the country could finally start paying some of the debts and would be able to afford some of what the country is trying to do but does not have enough money to do. Some may say that taxing the rich more is not going to help any and it would be a waste of time; however, the country would be able to afford everything that it is unable to pay for right now while the poor and middle class are attempting to pay what the rich is not paying. Social Security and Medicare are major problem taxes that need increased for the rich because they do not tax the rich enough even though the rich can afford to pay higher taxes, but the burden has fallen upon the poor and middle class (Berman). Social Security taxes are at the top of the list of taxes that need to get increased for the rich, since the administration only taxes a certain amount of a persons earnings. The Social

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Security portion of taxes is 6.20% of earnings (Administration). The administration only taxes the first $117,000 of a persons earnings and anything earned over that amount is not being taxed (Administration). The amount of money that is taxed by Social Security should really be increased to provide for the ever increasing amount of people who are starting to file for Social Security. If Social Security taxes do not get increased it might end up going away entirely and then everyone would not be able to live well in their old age, because they would run out of money to live on unless they had a wealthy life. One person feels that if the cap for Social Security were removed for top earners that it would help plenty, she says, the Social Security system would be solvent indefinitely and they still would be the richest and prettiest in all the land (Publius). Even if the overall Social Security tax rate is not increased a great deal to help, the overall cap of taxable earnings could be increased. Medicare is the next tax program that should be increased to help with the ever increasing cost of Medicare recipients. The normal tax rate for Medicare is 1.45% and the reduced tax percentage rate is only 0.9% (Administration). The first $200,000 of a persons earnings is taxed at the normal tax rate, but everything earned over the $200,000 gets taxed at the lower percentage rate (Administration). Even though Medicare does tax all of a persons earnings it could still be raised. It is great that Medicare still does come out of all of a persons earnings in a year, but it still could come out of all of a persons earnings at the full 1.45%. The economic benefits of raising taxes for the rich would be a tremendous help for the country and would allow the United States to start paying for the deficit that has become such a major problem in the country. The rich have many tax loopholes that they can benefit from that should be closed so that the rich are still paying the taxes that they should be paying

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(Berman). Luckily, income taxes for the rich have been increased, The 39.6% tax rate kicks in for earnings over $400,000 for individual taxpayers and $450,000 for married couples filing jointly (Erb). There is also a Medicare surtax for taxpayers who make over $200,000 or $250,000 for married taxpayers. It is incredible that income taxes for the rich have finally been increased to a larger percentage rate since the rich are skipping out on taxes; such as Social Security taxes. On top of all the taxes that the rich are being able to avoid there are some big corporations that are managing to have zero tax rates or even getting money back from tax returns at the end of the year when they really should be paying taxes (Krantz). These big name corporations use some rather shady methods to eliminate tax rates; such as; offshore transfer payments, harvesting losses, and Accounting rules, to get these zero tax rates (Krantz). These methods probably should not even be legal for them to do, but for some unknown reason they are legal. Offshore transfer payments (Krantz), are something that these big corporations use, but they are only helping the foreign countries where they have set up their subsidiaries. These foreign subsidiaries make raw materials and components in countries with low tax rates (Krantz). Then the components are bought by the corporations at well above cost (Krantz). By doing this, the overseas unit makes a large profit, which then escapes U.S. taxes, as long as it stays in foreign country (Krantz). The use of these kinds of tactics to cut their taxes to zero is pretty bad to say the least, since really they are not helping the U.S. while doing this. These large corporations should really help the country instead of helping these foreign countries get more money. They can and should be doing everything they can to help the country start getting out of the deficit.

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Some people believe that capping the earnings of people like Mark Zuckerberg and Bill Gates would do little to actually boost the poor and middle class (Berman). The only people that would believe this sort of thing would be those who did not do enough research or the super rich themselves because they do not want to give more of their own money away in taxes. It is not great that the super rich are the ones who get to decide their own tax rates since of course they are never going to raise them on themselves. However this belief that raising taxes or capping earnings of the rich would not help, is completely wrong because reforming the current tax codes could probably do so much to help the United States as a whole (Berman). Todays tax code allows a far larger share of income of the rich to escape taxation than the poor or middle class (Berman). Taxes on the super rich should be raised in the United States because they make ridiculous amounts of money and that money is barely being taxed, and if the taxes were raised for them the country would have enough money to pay for the deficit the country is in. Social Security taxes on the rich cause a big problem for the U.S since it only taxes the first $117,000 a person makes. Medicare has a similar problem except it does tax all of a persons earnings but the first $200,000 is taxed at 1.45% while anything over that amount is only taxed at 0.9%. Also the economic benefits of raising taxes on the rich would be a huge help in paying for the U.S. deficit. There are also some large corporations who make their way to a zero tax rate who are really not helping the U.S. because their money is not being taxed by the U.S. Now the country needs to work together as a whole to get the rich to be taxed more so that they are working hard like the rest of the people to work on the U.S. Deficit.

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Works Cited
Administration, Social Security. 2014 SOCIAL SECURITY CHANGES. 2014. 1 March 2014. Berman, Jillian. "Huff Post: Business." Raising Taxes On The Rich Would Reduce Income Inequality: Larry Summers 7 March 2014: 1. Erb, Kelly Phillips. "What You Need To Know About Taxes In 2014: Expired Tax Breaks, Obamacare Penalties & More." Forbes 5 January 2014: 2. 11 March 2014. Florida, Richard. Why Bill de Blasio's Tax Hike Won't Cause the Wealthy to Flee New York. 3 December 2013. 5 March 2014. Krantz, Matt. Large companies find ways to a zero tax rate. 19 February 2014. 7 March 2014. Landes, Luke. Updated: 2013 Federal Income Tax Brackets And Marginal Rates. 5 January 2013. 5 March 2014. Piketty, Emmanuel Saez and Thomas. Why the 1% should pay tax at 80%. 24 October 2013. 11 March 2014. Publius, Gaius. Meet the people who are so rich theyve already paid their 2014 Social Security tax. 15 January 2014. 11 March 2014. Sahadi, Jeanne. Obama's budget: Help for workers, taxes for the rich. 4 March 2014. 5 March 2014. Tracy, Marc. Bill de Blasio Should Just Admit It: He Wants to Tax the Rich. 27 January 2014. 5 March 2014.