Progressive Tax Policy Analysis
The social problem and the economic problem could be solved by higher taxation with the structure of tax code during 1950s, this could result in higher revenue for the government followed …show more content…
This could eliminate the cutting of benefits on retired people just to pay its debt. Paying off massive debts have a huge improvement on economic growth. (Johnson, 2014)
President Bill Clinton and the Democratic-controlled Congress politically implemented the policy of raising the top marginal rate to 39.6 percent in order to get deficit under control.
The Clinton tax policy of higher taxation have prevented the federal budget from getting deficit. (Parry, 2011). This just reduced the share of budget that pays interest. The extra revenue enabled the government to improve on infrastructure, investment on energy efficiently, social benefits and keep the economic wheels spinning. Thus resulting in prosperity for the citizen and significantly improving the GDP, Growth Domestic Product. It reduced the political instability from the concentration of wealth. (Johnson, 2014)
According to Africa News Service (2013) Countries like Kenya generated revenues by forming a high top taxation. The revenue was then financially subsidies to small and medium enterprises which enabled them to easily enter the market and reduced unemployment rate. This policy has enabled to create million jobs lifting at least millions of Kenyans from poverty and expand social protection. Increasing top tax rates would result in more efforts for the entrepreneur who wanted to make a …show more content…
President Obama’s and Chairman Rangel’s high taxation policies have made cooperation and upper class expenditures raised by paying significant percentage rates of their income. This leads to damage in economic growth due to low incentives in investing. It discouraged business investors to enter the market, effecting the long term economic growth. This reduced employment, submerging the employment rates. In some cases, Tax hikes did not improved budget balance as high earners primarily paid most of federal income tax burden. Tax hikes have a negative impact on economic activity of small business, driving them out of the market. Lacking of small business have plunge millions of job creation, draining the economic growth and have huge impact on struggling people such as minimum wage workers to lose their jobs. (Dubay,