Poverty is an increasing issue in modern day that stems from wealth inequality. Families that hold wealth throughout generations are making an increasing gap in income in the United States which is making the poor even more poor. Poverty can have several negative effects on a person’s long-term health, including heart attacks, inflammatory diseases, and even can attribute to a premature death. While some argue that a more aggressive progressive tax is the best way to solve things, the most ethical solution to this problem is to use a strong inheritance tax in order to return money back into circulation by spending it on schools. This will shrink the inequality gap and reduce poverty through education.
After the World War II, the country was flourishing with economic growth. People were all able to share the new wealth pouring throughout the country. However, the 1970’s came and economic growth started to slow and the inequality gap took off due to some policy changes relating to taxes. The way inequality is measured is through the Lorenz curve. It measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. In the period of 1979 to 2016, the Gini coefficient in the United States has grown from 34.6, to 41.5. This data very clearly shows that this problem is prevalent and needs to be acted on, as it significantly reduces the enjoyability of life for the lower class.
Poverty has been shown to significantly and negatively affect the long-term health of those affected by it. Living in poverty means eating lower quality foods, living in polluted air, and not being able to afford good health care. Low quality foods usually contain high amounts of carbohydrates and processed grain which can lead to obesity and diabetes. Polluted air can cause poor brain development in children, cancer, and other lung diseases. Poor access to health care can allow preventable diseases to go unnoticed and develop for the worse.
Inequality targets low-income families the most because the governments financial support is generally given to older people. “Those over 65 have weathered the past quarter-century much better than families with children, despite two major recessions. The net worth of older people’s households increased by 45 percent from 1989 to 2013…Families with children fared worse as a group. Overall, their wealth declined by 56 percent in the same period. Wealth inequality for these households grew significantly from 1989 to 2013. The top 1 percent saw their wealth increase by 156 percent, while parents in the bottom half saw their wealth shrink by 260 percent”. Households raising children are having trouble paying for their children to go to college. This isn’t only a threat to their future; it also affects the future of the economy. Without and educated and well-trained workforce, the country will see a reduction in its real gross domestic product.
Save your time!
We can take care of your essay
- Proper editing and formatting
- Free revision, title page, and bibliography
- Flexible prices and money-back guarantee
What a solution to this problem would look like is an increase in education spending which would give all the people of the United States a fair chance at being successful in the long run. Funding would be given priority to low-income areas first, then distributed to all schools in need. Money would go to teacher salaries, utilities, and food for kids that cannot afford it along with school supplies and other necessities that low-income families cannot provide. This all sounds great, but the tricky part about finding a solution is figuring out where to get the money to fund it. There are multiple paths that could raise a small amount of funds, but only one solution that will be introduced later that could solve Income inequality and poverty.
A possible solution to the growing problem of the wealth gap is a more aggressive progressive tax. This would take money from high income persons by using in income brackets to decide how much of their income will be taxed by what percentage. This is the most common idea when it comes to solving the issue, but it is immoral in some ways. There are several people that would be taxed that are being paid proportionally to their job’s value in society, but as the brackets move more towards the hundreds of millions, it is hard to imagine any occupation being worth its yearly salary. In order to efficiently and morally install a working tax, the majority of money should come from the 0.1% of the income spectrum by taxing 90% on the portion of the person’s income that exceeds the big buck border. These days, it is next to impossible to install a system like this when politics are so influenced by wealth in business, especially with a Republican president in office. When Alexandria Ocasio-Cortez, an American politician and member of the Democratic Party presented the idea for a 70% marginal tax rate for the income accumulated after ten million dollars, she was met with hate and foul speech. This goes to show that this approach to the problem would need revision, or a plethora of additional support.
The best idea for raising money for schools is an inheritance tax, in addition to a less aggressive progressive tax. An inheritance tax would cycle the piles of wealth accumulated by billionaires back into the economy. Currently, the wealthiest people in the world cannot possibly find ways to spend their earnings, so it gets passed on from generation to generation. In the current state the money is just being ‘sat on’, it stays in a bank or is invested in order to grow itself even larger. If this money was aggressively taxed, it would reintroduce merit for those who would usually thrive on the billions of dollars passed down to them by their parents.
This tax would not affect the low- or middle-class citizens as the bracket would be set around 10 million. After that, the inheritance could be taxed anywhere from 80-100%. There is little room for argument that this is immoral because the recipients did not do anything to actually earn the money. The currently ‘estate tax’ will only tax – after 11.4 million dollars, which is more than any individual would ever need to live off. A tax on money practically given as a gift is much more ethical than a progressive income tax. Instead of taking away money that people earn, it targets money that is leftover and returns it into the economy.
The problem of wealth inequality is a worsening problem that affects families by keeping them in a cycle of poverty. It is caused by greed from people who would rather watch the hard-working American people struggle to make enough to put their kids through college, than give up some of their billions of dollars. The solution is to increase the quality of education in the country in order to better educate the workforce and allow each to earn a higher salary. The funds for this will come from a stronger inheritance tax. This will improve the overall health of society for years to come.