Recently i have scrolled through one of my classmate, Nick Parkhaev’s blogpost, “Should we treat Millionaires differently?” regarding the tax system the United States plans to implement on Millionaires, 5.6% surtax to help the governments financial deficit. Nick states that this is “discriminatory as its not ethical to take more money away from people who have earned it” and resulting “millionaires hiring accountants to help avoid the tax, and discourage people from making more money since they know they will give it up through taxes”.
Although i agree 100% with what Nick is stating, but i believe there isn’t a “best” tax system, there is only a more efficient tax system. But as Nick stated, this would demotivate them, also it would result in a deadweight loss, therefore this is a less efficient tax system. Furthermore, i believe the reason behind the implementation of this new tax system may be more of a political purpose, as this causes the illusion of that the government is being more fair by taxing the rich, therefore winning more middle/lower class votes, as the global economy is still undergoing a recession.
