Inequality?Has it gone too far?
Shouldwe reduce taxes on the wealthy? Repeal the estate tax?
Taxingthe wealthy is important to the economy, it ensures that equalityamong the working citizen has been achieved. Just recently theCongress, which the majorities are the Republican, repealed the DeathTax Act of 2015 (the guardian and Brookings Institution, p.9).whichwas not fair to the low-income earners who are working tirelessly butyet they get paid so little which end up being taxed and leaving themwith nothing. If the country and the top leadership cared aboutequality and social mobility of the working citizen they should nothave repealed the death tax(the guardian and Brookings Institution,p.9). In fact, they should have increased to ensure that the rich aretaxed more since they earn too much yet pay too little. Statisticsshow that the estate tax that is imposed on the rich is too lenient,and it does not touch the first $5.43 million of a person’sindividual assets, as well as the first $ 10.86 million, belongs to acouple (the guardian and Brookings Institution, p.10). The realestate tax takes effect for any amount that is above the said amount.This contributes to about a 40 percent marginal rate above the onemillion.
Thoseagainst the real estate tax act argue that the tax hurts the smallfirms which pay taxes. The exemptions provided for the smallbusinesses. Secondly, the tax on real estate affects a realpercentage of the ordinary American citizen since it is only about5400 estates that will be under the obligation to pay the propertytax, which is slight above the 0.2% of all the estates in America(the guardian and Brookings Institution, p. 11). This is indeed quiteunfair since they are not the only people with real estates inAmerica. Also, the repeal of the estate tax is important since itdoes not affect the federal government collection since itcontributes only to 0.6% of the total collections (the guardian andBrookings Institution, p. 11).
Theshrinking American Middle Class
Themajority of the American middle class are not considered as themiddle-income earners partly because there has been a series offrustrations and anxiety among the individuals between these groups(Cohen, p.2). The reason is that of the economic performance ofAmerica, making the citizen and the middle working class fear abouttheir security and prospects and thereby making them feel vulnerableand exposed to harsh economic realities.
Thereare various factors driving the middle-class economy which includebut not limited to income instabilities increased the gap between themiddle class and the rich people in the country(Cohen, p.4). This hasbeen execrated by the fact that majority of American, who viewthemselves as neither rich nor poor, have a struggling real incomewhich they perceive as not rising despite their educational levels.The shrinking of the middle income also has been exacerbated by thefact that majority of the American always shift from middle class tolow class but by the time most them hit 60 years (Cohen,p.6). Theyare either on welfare, unemployment insurance or they have shrunk tobelow poverty levels.
Theshrinking has been magnified by the fact that per capita income hasbeen stagnant since the year 2000, whereas inflation has been on theincrease thereby diminishing the purchasing power of the consumers inthe disposable income for the middle class leading to a diminishedmiddle class. Despite the drops in prices of goods, middle-classgoods and services have been increasing, therefore, leading to a dropin the number of middle-class persons. These goods include collegefee, the cost of healthcare and housing(Cohen, p.7). The effects ofthe high cost are a drop in the disposable income which is almost thepoverty line that forces these individuals to rely on social safetynets such as food stamps and unemployment insurance.
ChildPoverty in the US
Accordingto the US census, there are approximately 16 million children in theUS under the food stamps program, and the statistics show that thenumber could have doubled after the recession in 2007/2008(theguardian and Brookings Institution, p.3). It therefore, means thatone in every five children in the US receives food stamps in the year2014. These numbers are shocking and what they mean is that thesekids could have been sleeping hungry were it not for the governmentintervention to provide public assistance to the needy families (theguardian and Brookings Institution, p.4). Hence it provides enoughevidence that more children are now living in poverty than in thepast.
TheUN report bolsters the evidence by documenting that among the 35developed countries in the world. The United States ranks 34th inchild poverty index(the guardian and Brookings Institution, p.4).These problems could escalate for the nation since the currentadministration is focusing more on increasing middle-class economicpolicy rather than proposing any concrete plans and programs thatcould aid in lessening poverty among the American families so as totame child poverty in the country.
Thetough economic times and also increased single parenthood has to leadto increased number of poor children in America(the guardian andBrookings Institution, p.5). For instance, the number ofsingle-parent families depending on the food stamps rose by 30percent, and the number of families with complete parents that dependon food stamps also doubled in 2014 as compared to the year 2007. Theresearch done by various leading universities have shown that thereare too many American children living in an economically insecurefamily, and it, therefore, poses a great threat to the future of thecountry.
TheAmerican economy needs to be revamped in a more profound way toensure that both the middle class and the low-income earners in theUS also afford to live decently in a country where the American dreamought to be alive. The rich should be taxed more to ensure thatincome equality is achieved. The taxation of the real estate shouldalso be repeal just like the death tax Act of 2015 to ensure thateven the middle-income earners get a position to increase theirwealth. America’s economic policy need to be reassessed and refinedto meet the aspiration of the working class in America who worktirelessly to make a living. Children should not be punished for amistake they have not committed therefore, I would urge that foodstamps to continue as the top leadership look for an amicablesolution.
Cohen,Patricia. A Shifting Middle: Middle Class But Feeling EconomicallyInsecure. 1st ed. 2015. Print. P 1-8
USInequality And The Estate Tax. 1st ed. the guardian and BrookingsInstitution, 2016. Print.