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Implement President Obama's five principles for tax reform and improve the current progressive income tax system

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Given the nature of the progressive tax system, it would be beneficial to government revenues and the economy for policies to be implemented that alleviate income and payroll tax burdens on the middle and lower classes and that increase income and payroll taxes on the top brackets.. This adjustment in policy would allow for everyone to pay their “fair share” as modern methods of taxation require. This is proposal is needed given the current economic conditions, and concurrently provides the compelling force necessary to motivate citizens to render taxes, in proportionality to their wealth.
Supporters: Taylor Morgan, Lisa Matulevicz
Opponents: None
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Laws and Regulations, United States Constitution
Article 1, Section 8 (Changes)

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    Problem Problem: Americans have seen a massive redistribution of wealth over the last forty years with the country surrendering nearly a quarter of the nation’s yearly income to the top 1% of Americans.
    Of all the new financial wealth created by the American economy from 1983 to 2004, 42% of it went to the top 1%, 94% went to the top 20%, and only 6% went to the bottom 80% of Americans. By 2007 the top 1% of households owned 34.6% of all privately held wealth. The next 19% had 50.5% of all privately held wealth, which means that the top 20 percent owned 85% of the Nation’s wealth, leaving only 15% of the wealth for the bottom 80% of Americans. To put this in perspective in 2010, the top 20% of Americans earned 49.4% of the nation’s income, while the bottom 15% of the population earned 3.4%.
    Loopholes in the tax system and botched economic policies such as the one implemented by former President Ronald Reagan and supported by subsequent Republican administrations that rely on a supply-side, trickle-down theory of wealth are certainly not the sole cause of the current economic quagmire in which the U.S. finds itself. However, such policies and negligence have expanded financial mismanagement, deepened inequality, and increased government indebtedness thus expediting the downward spiral of the U.S. economy.
    To grasp the societal changes that have resulted from such policies one has only to look to the increase in the excess of corporate remuneration. United for a Fair Economy reported that in the 1970’s CEOs made $35 to every $1 that their employees made. Today S&P CEOs average $10.5 million each, which puts the CEO to average worker ratio at $344 to $1. This gap is amplified even more when considering that the average CEO to minimum wage worker pay is $866 to $1 comparatively. Data on 50 private equity and hedge fund groups intensifies this disparity by reporting average pay for managers of these groups of $588 million, more than 19,000 times more than the average American wage earner. What this reveals is a disappearance of wealth from the hands of the middle-class, with the majority of money being concentrated into the hands of a few, the top 5%.
    If we look at figures even closer we will find that the pace of the growing disparity in wealth is increasing at an alarming rate. The Center for American Progress reports that during the 1st four years of the Bush Recovery Plan (2002-2006) the $863 Billion in Household income growth was divided as follows: Top 1% of Households, (amount distributed: $4.2 Million per household) in total $626 Billion, Next 9% of Households (amount distributed: $14,651 per household) in total $195 Billion, Bottom 90% of Households ($304 per household) in total $41 Billion. These statistics illustrate the division of capital in disproportionate amounts among the population with the majority of wealth being concentrated in the possession of a few incredibly wealthy individuals.
    Data gathered since the Bush Tax Cuts and presented in a 2005 article by Lee Price of the Economic Policy Institute made public the actual effects of tax policies that were supposed to stimulate economic activity on all fronts. In actuality precisely the opposite took place. The American economy suffered greatly in comparison to the average of past business cycles showing significant losses in the areas of GDP, Payroll Jobs, Personal Income, Consumption, and Equipment & Software. Along with the failure of the tax cuts to deliver the promised economic boom was the more apparent lack of revenue collected by lowered taxation. From fiscal year 2001 to 2005 the combined cost of tax cuts by the government had reached $260 billion an amount that Price argues would have helped enormously in balancing the deficit of the previous year. The effects of an ill-conceived taxation policy have wrought economic disaster and increased budget deficits. If the current economic situation is to be addressed and corrected then change in U.S. tax policy will have to take place.
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