Tax Hike on the Rich is Not Hurting Spending

Last updated on March 28, 2022

When President Obama proposed a tax increase on the wealthy it was debated by Republicans that the increased taxes would have adverse affects on the economy because the wealthy would decrease their spending. It was argued that a hike in taxes would directly affect other taxpayers who rely on the rich economically, such as employees, service providers, research scientists, and start-up companies.

Surveys have shown, in spite of the raised taxes, the rich are not decreasing their spending, investments, and even charitable donations. With large disposable incomes, a tax increase will not affect the lifestyles of wealthy. This is good news for the economy. Now, the U.S. Treasury will have more revenue without disturbing the small economic growth the government is trying to spur.

Even an increase in taxes would not affected the economy in an adverse way, further increases may. More than half of the rich surveyed said any further increases in tax rates could affect their spending.

President Obama has hinted towards more increases in taxes in any deal reached to decrease the deficit. Most average taxpayers will back this proposal, as they believe that it is the rich with money to spare who should be paying more taxes. Some believe that a slight increase in taxes across the board might work best. Whatever compromise is made in Congress, taxpayers will not see a tax cut anytime soon.