I agree with the Democratic perspective on tax policy from Presidents Bill Clinton and Barack Obama, which holds that taxes ought to be increased on the rich to control the deficit and national debt, avail more funding for government projects, because they can pay more in taxes. Usually, D emocrats raise taxes for the financing of social programs. The tax policy, in turn, leads to the creation of businesses (Barton, 2019). The party emphasizes that government spending leads to good jobs, which ensure economic growth. As such, Democrats are believers of the Keynesian economics, or the aggregate demand, which indicates that when the government funds projects, the programs push new money into the economy. Keynesians assume that prices remain stable and, thus, any spending by consumers or the government grows the economy (Barton, 2019) . As such, it is essential to make an analysis of the Democratic perspective on tax policy.
I concur with the Democratic perspective on tax policy because it strongly opposes tax cuts like those made by George W. Bush availing relief to the wealthy at the expense of the middle and lower classes together with those staying abroad. Hence, the Democratic Party says that the U.S. requires a tax code, which rewards work and generates wealth for more individuals, and not a tax policy that hoards affluence for those already having it. To ensure this, President Obama and Democrats in Congress cut taxes for each working family, getting more money for Americans in most need. Therefore, a typical family saved $3,600 during Obama’s first term (OnTheIssues, 2018). Furthermore, the Democratic perspective on tax is fair to the ordinary citizen because it fights to prevent middle-class kinfolks and those aspiring to enter the middle class from having their taxes rise. In addition to this, the party would then extend tax relief for working families and those footing college bills, while compelling the richest and corporations to pay.
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Furthermore, the Democratic perspective on tax realized the assault that the middle class was under; hence, it rejected the substantial Bush tax cuts for the richest. Subsequently, they fixed taxes for families creating more than $200,000 per annum at a similar level with the late 1990s, an era of great affluence when the richest Americans flourished without special treatment (OnTheIssues, 2018) . As such, the party cut taxes for ninety-eight percent of Americans and enabled families to meet the economic trials of their daily lives. This is unlike the Bush tax slash, which would allow the richest 1% of Americans to have the funds for new sports cars while middle-class Americans would only afford a warm soda. Obama also proposed a specialized tax increase on products like tobacco in order to reimburse for early childhood education for four-year-olds emanating from underprivileged and middle-income families (Ehrenfreund, 2015). Similarly, he recommended a retirement savings strategy and called upon Congress to make everlasting tax breaks to counterpoise the price of higher education.
Likewise, the Democratic perspective on tax means good for Americans because it helped President Obama’s budget to focus on programs to enhance roads, bridges, together with railways countrywide (Ehrenfreund, 2015). Also, through the tax policy Obama was able to focus on expanding unemployment insurance, and dedicating $215 million to research on precision medicine in order to use patients' genetic evidence to modify medications explicitly to their bodies. Additionally, the budget entailed the fund to help fight wildfires. To bring this to effect, the suggestions to raise taxes involved raising the capital gains tax, which would be paid by investors upon selling at a profit. Also, Obama aimed at placing a new tax on inheritances, and lower the corporate tax rate to twenty-eight percent from thirty-five percent. Consequently, this would limit corporate tax deductions (Ehrenfreund, 2015). Besides, by imposing a tax on huge banks to compensate for their advantage in the market, the government would be able to increase its sources of revenue.
Also, the Democratic perspective on tax saw President Obama instrument Obamacare or the 2010 Patient Protection and Affordable Care Act (ACA). It was assessed severally by the Congressional Budget Office (CBO), which scored it as a reasonable budget deficit reducer because it involved tax hikes chiefly on great income taxpayers and cutbacks in future Medicare cost upsurges, counteracting subsidy costs. Moreover, Obama signed up the American Taxpayer Relief Act of 2012 that entailed the termination of the Bush tax cuts for high-income recipients and instigated a cap on expenditure by the military together with other optional categories of spending. Compared to the previous years, it considerably lowered the deficit and restricted future cost rises. Subsequently, this law along with the recuperating economy dropped the deficit to the historical typical relative to GDP by 2014. The cap on tax breaks for the rich at twenty-eight percent would generate more than $584 billion within one decade, which would inhibit the upper-class breaks for mortgage interest, municipal bond interest, charitable donations, and company provided health insurance (Republicanviews.Org, 2015).
As such, the Democratic perspective on taxing the rich to pay for projects that assist poor people and the middle-income class is advantageous to all Americans. Money dispensed to project such as food stamps, Pell grants affordable health care, and Earned Income Tax Credit given to working and middle-class Americans through tax breaks will be redistributed into the economy and result to positive economic growth. On the other hand, high taxation on the rich would have little effect on their spending, since the more significant part of their salary would undoubtedly have gone into reserve funds. Therefore, I am a big supporter of the Democratic perspective on tax policy.
References
Barton, S. (2019). The Difference Between Republicans vs Democrats on Taxes. Retrieved from https://www.investopedia.com/articles/economics/09/us-parties-republican-democrat-taxes.asp
Ehrenfreund, M. (2015). Key questions and answers about Obama’s new budget. Retrieved from https://www.washingtonpost.com/news/wonk/wp/2015/02/02/a-simple-guide-to-obamas-new-proposals-for-spending-and-taxes/?utm_term=.4ad7966add57
OnTheIssues. (2018). Democratic Party on Tax Reform. Retrieved from https://www.ontheissues.org/Celeb/Democratic_Party_Tax_Reform.htm
Republicanviews.Org. (2015). Democratic Views On Taxes. Retrieved from https://www.republicanviews.org/democratic-views-on-taxes/
