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Why Income Taxes Are Regressive

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  • Why Income Taxes Are Regressive

    The American people are constantly told by the left that income taxes need to be higher in order to "soak" the rich, while the right keeps telling them that income taxes should be lower because they care so much for the middle class.

    Unfortunately for the American people, neither the left nor the right cares about the middle class. They have purposefully conflated income with wealth, and the media and politicians on both sides of the aisle pretend that income is indeed wealth.

    As a result, one side will argue for higher income taxes because they're oh so progressive. Meanwhile, the other side will argue for lower income taxes because they're so pro business. Meanwhile, their rich donor base sits back and laughs at this circus. Why? Because the rich don't have income. The rich own all the assets and what cash flow they receive is through dividends and capital gains, which again are not considered income. This investment income is taxed at half or less vs active income from working.

    So why are income taxes regressive? Consider this. How is someone supposed to achieve the American Dream and become wealthy if they are taxed at 50% or more for every dollar of income they earn? How can you get ahead and build wealth through income if income is taxed so sadistically?

    Ironically, the 70% income tax rates now proposed by members of the left would be the most regressive in the world. It would cement the inequality of wealth between our people. The wealthy would stay wealthy because their wealth is never taxed, and any investment income receives highly preferential tax rates. Social mobility would disappear because anyone who isn't already wealthy would find it extremely hard to earn income and build wealth.

    This is a monumental scam on the American people that needs to be addressed. The American people deserve a better media who will stand up for them and actually highlight this atrocity. Of course, don't hold your breath because the media is owned by the same donor base that wants these highly regressive policies to continue.

  • #2
    What's worse is whenever someone dares mention that income taxes are by their nature regressive, some member of the deep state or donor class will come out and try to obfuscate the issue by claiming that income taxes are progressive.

    Yes, the American people obviously understand that marginal tax rates increase for higher levels of income. That's not what we're talking about here. We are saying income taxes in general are regressive because it falls largely on the middle class, and any aspiring entrepreneurs trying to earn a lot of income and actually build wealth.

    If you prevent the build up of wealth, or make it extremely hard with very high income tax rates, you essentially maintain the status quo in the distribution of wealth. The middle class and poor can never "make it" because how can you when every dollar you earn is taxed at 50% to 60%? And the rich stay rich because wealth is never taxed, and capital gains and dividends are taxed are 20% or lower rates.

    This is the scam we are talking about, and it's extremely scary when the deep state comes out to try to repress this fact whenever someone mentions it.


    • #3
      If income taxes are regressive, then the Democrats are really trying to cater to the ultra wealthy and the poor, while the Republicans are nominally helping the middle class by trying to lower income taxes. However, it seems both parties ultimately support the ultra wealthy and asset rich who also happen to be the "donor class." This is why you never see wealth mentioned by politicians or the media. Wealth simply doesn't exist in their minds, it's only income that should be talked about.

      With that said, I'm not surprised that Democrats especially are desperately trying to obfuscate the issue, because if their masses of poor voters ever found out about this scam, it'd be all over for their donors at the tippy top. Maybe a constitutional amendment would even be possible at that point, to tax wealth, and then it'd be all over for them.


      • #4
        Trust me, I get and sense the frustration here. See the article below on things to consider before you buy an apartment in NYC, and some of the issues pointed out are the high cost of living (3x the national average) as well as the extremely high combined income tax rates (city, local, plus federal). It makes it all but impossible to get ahead, especially if you live in a high income tax jurisdiction like NYC or CA.

        With that said, I think we're stuck with income taxes because the constitutional prohibits a direct tax and pretty much makes it impossible to enact a wealth tax:

        We would need a major constitutional amendment to make it possible.
        There are many benefits to buying an apartment in New York City and living in the world’s greatest city; however, it’s important to understand what the downsides are before you buy an apartment in NYC. We'll explain the pros and cons of buying an apartment in New York!


        • #5
          Excellent post to know the reasons why income taxes are very aggressive.