During the last three decades the wealthy in America have become wealthier yet. American capitalists today are richer than virtually any other group in any country at any point in history. At the same time, the United States is experiencing record deficits, which threaten to bring the economy to its knees.
It is therefore hardly surprising that the solution proposed by some is to raise taxes on the rich. President Obama has proposed doing so. Investing giant Warren Buffett made the case for taxing the wealthy this week in the New York Times.
In one respect, Obama and Buffett are completely right. The rich do not “need” to pay lower taxes, and can certainly “afford” tax increases. If raising taxes on the rich would solve the deficit without hurting the economy, we would support the president’s tax policy in a heartbeat. It would certainly be a more equitable solution to lower the already astounding standard of living of hedge fund owners than to “cut some kids off from getting a college scholarship.”
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