Do higher taxes lead to Socialism in America? This is the question I had on September 1, 2009 when I was still slaving away at my corporate job. Paying lots of taxes while the world was falling apart wasn’t sitting well with me. I had also just started Financial Samurai in July 2009.
Now that the world is falling apart again 2020 thanks to the coronavirus pandemic, it’s more than likely we will have higher taxes in the future to pay for our spending. Therefore, I’m once again asking whether the grind is worth it.
Higher Taxes And Socialism
Someone once said, “nothing is certain except pressing the reply all button by mistake and taxes.” How true the saying as we face rising taxes under the Obama administration.
Supposedly 32% of Americans filers pay ZERO TAXES! I doubt this statistic sits well with the other 68% of files who pay taxes. I also doubt the percentage of non-tax payers could be that high, but either way, even 15% is a lot.
The good thing for high income earnings is that the highest marginal tax rate has come down by almost half since the 70’s. Furthermore, generally if you are paying no taxes, your adjusted gross income is less than $8,350 as a single, or $16,700 as a married couple.
Wouldn’t you rather make more money and pay taxes than make little money and pay nothing?
It just feels bad that the average American pays a higher percentage of his or her wages in taxes than in savings.
Given we don’t blog for a living, and several readers asked me this afternoon “whether I think higher taxes lead to Socialism in America, Yes or No only”, my answer and thesis is therefore: “Yes, higher taxes do lead to socialism in America.”