Last week, the U.S. House of Representatives voted to permanently extend the individual tax cuts of the Tax Cuts and Jobs Act of 2017, sending the bill to the Senate for further consideration. The 2017 bill, which was the largest reform to the federal tax code in over 30 years, provided tax cuts for over 80 percent of Americans and slashed the corporate tax rate from 35 to 21 percent. Since President Trump signed this historic bill into law, American workers have seen higher wages, workplace bonuses and renewed economic confidence. For many Americans, another $2,000 in their pocket makes a world of a difference, regardless of Democratic Minority Leader Nancy Pelosi’s description of that extra money as “crumbs.”
Tax policy is typically considered fiscal policy when discussing its merits and benefits — and rightfully so. A competitive tax structure that allows Americans to keep more of their hard-earned paychecks spurs spending, investment and, subsequently, economic growth. A low tax rate is beneficial for American workers, American businesses and our economic competitiveness abroad.
History has shown this, time and time again. While tax policy has numerous economic ramifications, it is important to recognize that it is also a moral issue. One of the hallmarks of our country is the principle of individuality. The belief in individual responsibility and freedom is enshrined in our Constitution. The right to live as you please, reap the benefits of your labor and own property are all evidence of this. Overtaxation stands in sharp contrast to these principles, as financial choice is a central aspect of individual freedom. Americans work diligently to provide for themselves and their families. According to the the Bureau of Labor Statistics, the average American works 44 hours a week, or nearly nine hours a day. Is it morally justifiable for the federal government to tax its hard working citizens at absurd amounts — in some cases, nearly 40 percent of their annual income? Americans — not the federal government — are entitled to the fruits of their labor and deserve control of their own financial decisions.
Taxation is obviously essential to run our government and maintain societal functions. Our schools, law enforcement, military and infrastructure all require substantial funding. Yet past a certain threshold, the necessity of taxation will inevitably be abused, becoming a burden on Americans. Unfortunately, this has been the reality in America for generations and will continue to be for the foreseeable future. Last year the federal government generated $3.3 trillion in revenue through taxation, redistributing nearly two-thirds of it through various entitlement programs. It is time to acknowledge not only the economic consequences of our government’s reckless tax-and-spend approach to fiscal policy but also the moral implications and hindrance of one’s financial freedom caused by this approach.
Wright Ricketts is a senior banking and finance and managerial finance double major from Memphis.