Reading Response: Race - The Power of an Illusion

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Reading and film response
Reading Response
The reading is in response to the suggestion of democrats that the wealthy should pay more taxes. According to the article, this may not be achieved since the rich are experts in avoiding taxes. They tend to target tax incentives by relabeling their income (Steverman and Alexander). It’s easy to agree with the perspective of the article that raising the income tax alone will not reduce income inequality. However, taxing on wealth could be helpful since wealth is mostly undertaxed. Incorporating options like land tax might address acute wealth inequalities. Besides, it will also create extra revenue for the government, which can be channeled in the provision of public services and reduces poverty without affecting the growth of a country.
The article, however, recommends a more suitable solution, which is keeping track of the techniques the rich use in evading taxes. It’s tough, for instance, to tax the actual income tax of business owners who are among the wealthiest people. They enjoy the flexibility of when and how to pay their taxes. Their salary can also be set very low for them to boost their profits; hence income tax will still not be valid. Other issues that make income tax inapplicable are the issues if pass-through businesses, the concept of working rich whereby their income is obtained from human capital, and not physical or financial capital. Presumably, all this can be resolved by coming up with laws on properly structured income taxes that put into consideration all those possibilities of tax dodging. As a result, the regulations will come along with actions to deal and tackle any incidences of avoiding tax payments. Notably, this has even been made easier by the improved techn...