High Taxes and Handouts: Do They Discourage Work?
The United States needs to rethink its entitlement philosophy.
Not only are the trillion dollar deficits and rising entitlement spending unsustainable, but it encourages people to work less.
If America wants to be a prosperous nation, it needs to reward hard work, not punish it.
The current system, which rewards people for not working and punishes people for working hard, needs to be changed.
Encouraging People to Work Less "Redistributing the wealth," which many progressive politicians are fond of, cause the wealthy to want to work less and make less money.
While some people in the upper tax brackets work for a salary and have a boss to answer to, many work for themselves and can choose how much they want to work.
Just as some middle class families figure that the costs of paying for day care, business attire, and meals out can make a second family income not worthwhile, heavy taxation can make working overtime less desirable.
If taxes are not raised or entitlements are not cut, every single dollar of tax money would go towards the entitlement programs Social Security, Medicare, and Medicaid by 2052.
Obviously, taxes would have to be raised, benefits would need to be cut, eligibility will need to be reduced, or a combination of all three would have to occur.
According to the Congressional Budget Office, under the current benefits, by 2082, tax rates in the highest tax bracket would have to rise to 88 percent, the middle tax bracket would have to be raised to 63 percent, and the lowest tax bracket would have to be raised to 25 percent.
With an 88 percent tax rate, who would want to work? This is just Federal taxes.
If you figure in state taxes, it becomes almost pointless to work more than a certain amount.
Why would a plastic surgeon want to work 5 days a week when he could work 3 days a week and bring home almost the same amount? Why would a Hollywood actress star in two movies in a year when working on a second film would pay practically nothing? Actors that received a percentage of box office profits might choose to sit out a year entirely, if the amount that was coming in from royalties already would put them into the highest tax bracket.
Which world would you rather live in? A world where your doctor was conveniently available, or one that only worked Monday through Wednesday? A world with two of your favorite stars movies released every year, or one where your favorite actor only occasionally starred in films? Discouraging People from Working Harder On the other end of the spectrum, excessive giveaways make it more costly for low income individuals to work more.
Even without excessive taxation, workers lose money and benefits as they climb out of the poverty level.
First, they may lose their food stamp benefits.
As their income continues to rise, they price themselves out of Medicaid.
They lose financial aid as they try to go to college to improve their lives.
In some cases, it may make sense to turn down a raise or refuse overtime in order to keep income low enough to not lose these entitlements.
Genuine Need There is genuine need out there.
Some people are too disabled to work.
Others cannot find work and lack the skills or capital to start a business of their own.
Cutting off all entitlements all at once would be very painful.
They need to be cut as soon as possible, or the whole system might fail and emergency cuts would have to be made, leaving many unprepared.
Americans tend to be a charitable people.
Right now, many are having a difficult time just keeping their own heads above water, but many who can help will.
Charity needs to be encouraged for those who need help, whether it is providing assistance to the disabled, or helping a single mom find a job.
If the entitlement culture is ended, and people are able to keep more of their money, rather than having the government redistribute it for them, perhaps people will have the ability to be more charitable in the long run.
Not only are the trillion dollar deficits and rising entitlement spending unsustainable, but it encourages people to work less.
If America wants to be a prosperous nation, it needs to reward hard work, not punish it.
The current system, which rewards people for not working and punishes people for working hard, needs to be changed.
Encouraging People to Work Less "Redistributing the wealth," which many progressive politicians are fond of, cause the wealthy to want to work less and make less money.
While some people in the upper tax brackets work for a salary and have a boss to answer to, many work for themselves and can choose how much they want to work.
Just as some middle class families figure that the costs of paying for day care, business attire, and meals out can make a second family income not worthwhile, heavy taxation can make working overtime less desirable.
If taxes are not raised or entitlements are not cut, every single dollar of tax money would go towards the entitlement programs Social Security, Medicare, and Medicaid by 2052.
Obviously, taxes would have to be raised, benefits would need to be cut, eligibility will need to be reduced, or a combination of all three would have to occur.
According to the Congressional Budget Office, under the current benefits, by 2082, tax rates in the highest tax bracket would have to rise to 88 percent, the middle tax bracket would have to be raised to 63 percent, and the lowest tax bracket would have to be raised to 25 percent.
With an 88 percent tax rate, who would want to work? This is just Federal taxes.
If you figure in state taxes, it becomes almost pointless to work more than a certain amount.
Why would a plastic surgeon want to work 5 days a week when he could work 3 days a week and bring home almost the same amount? Why would a Hollywood actress star in two movies in a year when working on a second film would pay practically nothing? Actors that received a percentage of box office profits might choose to sit out a year entirely, if the amount that was coming in from royalties already would put them into the highest tax bracket.
Which world would you rather live in? A world where your doctor was conveniently available, or one that only worked Monday through Wednesday? A world with two of your favorite stars movies released every year, or one where your favorite actor only occasionally starred in films? Discouraging People from Working Harder On the other end of the spectrum, excessive giveaways make it more costly for low income individuals to work more.
Even without excessive taxation, workers lose money and benefits as they climb out of the poverty level.
First, they may lose their food stamp benefits.
As their income continues to rise, they price themselves out of Medicaid.
They lose financial aid as they try to go to college to improve their lives.
In some cases, it may make sense to turn down a raise or refuse overtime in order to keep income low enough to not lose these entitlements.
Genuine Need There is genuine need out there.
Some people are too disabled to work.
Others cannot find work and lack the skills or capital to start a business of their own.
Cutting off all entitlements all at once would be very painful.
They need to be cut as soon as possible, or the whole system might fail and emergency cuts would have to be made, leaving many unprepared.
Americans tend to be a charitable people.
Right now, many are having a difficult time just keeping their own heads above water, but many who can help will.
Charity needs to be encouraged for those who need help, whether it is providing assistance to the disabled, or helping a single mom find a job.
If the entitlement culture is ended, and people are able to keep more of their money, rather than having the government redistribute it for them, perhaps people will have the ability to be more charitable in the long run.
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