“Take from the rich to give to the poor” – listening to this teaching by our childhood hero, Robin Hood, would collapse the USA’s economy. It would cause everyone to plummet to poverty very quickly.
I have noticed that the majority of people are convinced that the solution to improving the life of citizens who earn little is to shift the weight of taxes onto those who work all day, creating wealth and, therefore, more places of work.
It is thanks to the richest people that the American economy is one of the most powerful in the world and allows us to live good lives.
And this is why these people should be helped more from the state.
If, one day, a worker is fired, the American economy would not suffer at all. But if, one day, a prominent company stops operating, we will be very much affected:
Less money would circulate in the State, many jobs would be lost and the economy would largely weaken. In this case, a very dangerous, vicious cycle would be triggered.
Despite this, however, income taxes are still largely considered. And, every time, my ears bleed listening to the crap I hear about it.
Many see this as a solution to reduce the social gap between the rich of our USA and the ordinary people who, unfortunately, struggle to make each month.
Reducing this gap would mean bringing the rich and the ordinary people to an equal footing, on an economic level.
Ideally, the citizens who are now facing difficulties and earn less should find an economic advantage at the expense of those who have a higher income, who would become more impoverished.
This way, the real engines of our state and those who contribute value to our society are the ones who are put in difficulty.
The American economy, therefore, would no longer grow and, instead, lose a lot of wealth in a short amount of time, reducing its power at an international level.
The ideal is to maintain, or even increase, this gap so that the USA can grow stronger and prosper, thus bringing more money into the pockets of all Americans.
In reality, things are much more different than what they want to make you believe.
HERE IS HOW TAXES ON THE WEALTHY HAVE IMPOVERISHED MILLIONS OF CITIZENS AROUND THE WORLD, AND HOW AMERICA RISKS DOING THE SAME
Some European countries have already tried to increase taxes based on income by trying to reduce the gap between the rich and the ordinary people with the aim of improving the life of the weaker.
But the result was bankruptcy:
“It was shown that taxes on wealth have in practice an insignificant effect on income inequality”.
In a nutshell, the countries that introduced them have absolutely not helped those citizens in difficulty to improve their lives.
This is what was written in an article by Professor Berman published in the Scientific Magazine PLOS ONE.
In fact, research has already shown that this type of taxation is an ineffective tool to help citizens.
“There is no evidence that reducing income inequality leads to economic growth. It can even damage growth because it discourages savings and investments.”
This is what is written in an interesting article published on the Manhattan Institute website.
All this leads to serious consequences:
· Investments are less.
· The accumulation of capital is discouraged.
· There is the consequent reduction in innovation and the prevention of growth.
In conclusion, we can gather that income inequality is actually a resource because it guarantees the State the possibility of producing more which enriches its citizens.
On the other hand, taxing the richest to make them equal to the rest of the population would probably cause them to invest abroad in order to save their earnings, moving their resources outside of the State and actually impoverishing it.
Already, several European countries have experimented with this kind of tax and have faced the consequence of great entrepreneurs deciding to invest abroad.
As the French economist, Alain Tranoy, and adviser for public policies reported:
“The tax on wealth, in some countries, seems more efficient for driving away the rich than to effectively redistribute wealth”.
From the Washington Post’s article, “Old Money, New Money Flee France and Its Wealth Tax”, it was explained how this type of fee has generated damage to its economy in France. Such as:
· Capital drop.
· Brain drain.
· Job loss.
· Significant decline in tax revenues.
The result: a total earning of almost 3 billion euros. But a loss of more than 120 billion euros for the escape of the great capitals.
Despite these disappointing results, unfortunately, income tax is beginning to spread dangerously to the international scene.
New Zealand is one example whose government has decided to:
· Increase the maximum tax rate for those who have the highest incomes of the country to 39%.
· This new fiscal rate will therefore affect all those who earn more than 180,000 a year (2% of the population).
· It has been estimated that this type of manoeuvre will bring about 500 million in the country that will serve to help citizens in difficulty.
And when such news spreads among people there is risk is that it should affect the opinion of the masses that might think of taking advantage of a manoeuvre of this sort.
But the reality of the long-term situation is that all those who go would become miserable as economic growth would stall, and they would lose more money over time, giving life to a very dangerous, vicious circle.
Therefore, it would be very useful to make people aware of the consequences such a thing could bring.
A NEW TAX ON VALUE FOR THIS WHO CONTRIBUTE LESS TO THE ECONOMIC DEVELOPMENT OF THE COUNTRY
Given the errors committed by many countries around the world, we must realize that it is not important that a person works hard but how much value they produce for society.
If a person has an insignificant job and does not produce anything of value for the State, it is right that they earn less and pay more tax because the contribution of that person is minimal to society.
In fact, in many cases, the person in economic difficulty takes more from the State for assistance as opposed to a successful entrepreneur who enriches the economy.
Another example are football players.
Many say that it is not right that they earn millions while the miner who breaks his back all day only earns the right to survive.
The point is that the market is based on value and not on the sweat off of a worker’s forehead or how much they break their back all day.
It makes no sense to put those who contribute to the economic growth of our country in difficulty.
These should be the workers that are less taxed because it is thanks to them that the USA has become more powerful over time and can improve its citizens life condition.
The government should, then, measure the contribution that a person or company leads to the State.
So, this new value fee should concern, above all, the companies that:
· Overtime, demonstrate that they cannot increase their contribution to our country.
· Do not invest in the new generations and therefore do not bring any significant innovation.
· Do not lead to an increase in employment over time.
· And, consequently, do not lead value to the market.
Those who contribute to the increasing the wealth of USA should enjoy strong tax relief as a prize.
On the contrary, those who do not show growth over time and do not lead to any useful contribution to the country should be subjected to increased tax.
This is how taxes should be managed. They must be an incentive that drives people to improve and, as a consequence, makes our country richer.
This way, they contribute to helping improve the quality of life of the entire American population.
If you want to know more about me and my ideas, click here to remain updated on news and advice you can offer you an almost millionaire Italian entrepreneur like me: [Nic’s Ideas]
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