In order for governments to function properly and effectively provide services for their citizens, they need revenue. This revenue is best found in taxes. When the richest individuals and corporations pay their fair share, the average person benefits. Schools, infrastructure, healthcare programs and safety nets rely on tax revenue. The majority of Americans depend on these services far more than billionaires ever will.
Taxes are the collective pool of money that allows a society to function. They fund everything from the roads we drive on to our own school. Without taxes, the government cannot provide the services we rely on everyday.
So why are people calling to tax the rich? Most would expect all working people to pay their fair share. Here’s the truth: in 2021, the average American paid a tax rate of 13%, whilst in the same year, a White House study found the wealthiest 400 billionaire families in America paid an average of just 8.2% of their income. The study that found this was recently removed from the White House website by the current administration.
The reality is that the demands to tax the rich stem from people’s perception of inequality. The U.S. economy has developed into a K-shaped economy: the rich shoot upward, propelling themselves further, while the average worker flatlines or falls behind. Around 21 states (mostly industrial and rural ones) are currently either in a recession or close to entering one according to Mark Zandi, chief economist at Moody’s Analytics. Fresh college graduates are entering an increasingly competitive job market as AI adversely affects entry-level positions. The top 10% of households by income are now responsible for about 50% of consumer spending.
Now another issue is untaxed wealth, mainly it tends to sit still. Economists measure this through “velocity,” the rate at which money moves throughout the economy. High velocity means money changes hands often, stimulating growth and benefiting more people. Low velocity means money stagnates in the accounts of the wealthy. Rich households are more likely to park their fortunes in stagnant, long-term investments rather than riskier ventures that could create jobs or spark innovation. In other words, money hoarded at the top helps fewer people and only increases the money the wealthy already hold.
When the average person feels like they have to spend more working hours just to stand on their two legs, whereas the ultra-wealthy make money in their sleep, inequality grows.
With President Donald Trump’s administration, who has made sweeping changes to the way the government handles the U.S. economy, this inequality has grown larger and larger. From extensive foreign trade tariffs to interfering with integral economic reporting, the U.S. economy has started to become a haven for the rich and the foundation for the erosion of confidence in the U.S. economic system.
Just last month, Trump fired Erika McEntarfer, the commissioner of the Bureau of Labor Statistics (BLS), after she presented the July jobs report which indicated that only 73,000 jobs were added, which fell well below expectations. Revisions for the months following Trump’s inauguration were also slashed down. In a social media post following her firing, Trump claimed the numbers were “rigged in order to make the Republicans, and ME, look bad.” His move to fire McEntarfer risks politicizing key economic positions and erodes public trust in government data. If officials can be removed for reporting statistics that aren’t favorable to those in power, then the integrity of economic reporting is undermined from all sides. Independent agencies like the BLS exist to provide objective information free of bias — it’s a part of our checks and balances.
On Aug. 25, the Trump administration issued a motion to remove Lisa Cook from the Federal Reserve’s board of governors, but a federal judge ruled that the firing was illegal, reinstating her. This illustrates Trump’s growing desire to control the way money moves through the market so that he may appeal to voters in the short term, regardless of the harm his influence may have on confidence around the world of the U.S.’s economic stability.
Nowhere was this clearer than the “One Big Beautiful Bill” (BBB), that was controversially ratified last June. Trump had long campaigned on the promise that his administration would defeat the deficit — the White House Council of Economic Advisers claims that the BBB would ultimately pay for itself. In reality, the BBB has increased the nation’s deficit by $2.8 trillion, taking more money away from vital services such as Social Security, Medicaid, food stamps, federally funded weather forecasting and more.
The tax cuts provided by the BBB could give tax handouts of about $400 thousand to the top 0.1 percent… The Budget Lab at Yale University reports that low and middle income households are also unlikely to benefit much from the BBB. Therefore, working Americans are left with heavier burdens and fewer protections. It is no coincidence that one of the richest men ever to hold the presidency upholds a system where billionaires pay less. The rising inequality isn’t an accident — it’s policy written by and for the wealthy.
Extracting money from the poor and funneling it upward has become routine in the modern economy. Predatory “earned wage access” apps, payday loans dressed in a sleek, modern disguise siphon cash from desperate workers. Celebrities and public figures alike push cryptocurrencies, only for ordinary people to get burned in pump-and-dump scams that move hundreds of millions of dollars from clueless investors to the pockets of the rich. Inequality is so prevalent that it’s starting to find homes outside just the tax brackets, into financial tools everyone has in their pocket at a moment’s notice.
Critics argue that increasing taxes on the rich will only encourage them to exploit more loopholes than they already do. This should not be an excuse to not fight for change. It should be a reason to pull average people together to close those loopholes and disincentivize the tax dodging, the rich and our president partake in.
As high school students enter the workforce and gain the right to vote, taxes will become more than an abstract political talking point. The youth of today need to hold politicians accountable for what they’ve promised, and ensure that equality prevails, for the common good and general welfare.
One thought should be on their minds in terms of taxes. There should not be a class of people that pay less, work less, and make more money than most can even think of making in a lifetime. It’s not right.
