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Famous author Stephen King wrote a vulgar article in the Daily Beast calling on Congress to raise taxes on the wealthy. He is just one of several high-profile rich guys, including Warren Buffet and Mark Zuckerberg, that want to pay more in taxes. However, raising taxes on the wealthy is the wrong approach that will hurt everyone.
Tax hikes on the rich are unjustified from a moral and a pragmatic perspective. All persons are entitled to keep the fruits of their own labor. People should be free to spend or donate their rightfully earned money as they please without government coercion. It is unjust for the government to forcibly take money from one person to give to someone else in the name of “fairness.”
Stephen King writes that, “we all should have to pay our fair share.” Well, fair is a subjective term. King implies that he should be paying 50 percent of his income in taxes. Why 50 percent? Why not 49 or 51 percent? This should be obvious statement: different people have different perspectives on what’s fair.
If Stephen King considers the amount of taxes he pays to be unfair, then yes, he should donate to the federal government. Nothing is stopping him. People donated $3.5 million to the U.S. treasury to reduce the debt in 2011. That’s a low number considering how many people live in the United States.
There are numerous possible explanations to why more people don’t donate to the government. Some might say that people are “selfish” but that argument doesn’t add up. Americans donated a whopping $347 billion to charity in 2011. The clearest explanation is that most people see more valuable uses for their money than donating to the government. Government doesn’t do anything particularly well. Most people would rather donate to private charities that have a better track record of actually helping people.
From a pragmatic perspective, raising taxes on the rich is economically counterproductive. Taking money away from job creators in the private sector that could have used that money to expand their businesses will hurt economic growth. The government lacks proper incentives and cannot spend money better than private citizens.
Many people are under the false assumption that tax hikes will translate into more tax revenue. But these people do not realize that higher taxes alter incentives and human action. People will be deterred from starting new enterprises and expanding their businesses which means that production will be curtailed. High taxes will ultimately result in lower tax revenue and hampered job growth.
Raising taxes on the rich is wrong from a moral and pragmatic perspective. Dramatically cutting spending is the best way to reduce the federal deficit-- not forcing job creators to surrender more of their money to the federal government.