Tax Increases for the Wealthy: An Unintended Consequence

Political convictions aside, most of us average everyday Americans are repulsed by the idea of the rich getting tax breaks. Recently, I heard an angry pundit on the radio exclaim something along the lines of, "99% percent of the nation's wealth is owned by 1% of the population. How much more do they want? Do they want it all?" Most of us, I think, would echo this sentiment. The rich have plenty of money--more than they need. It makes sense for them to be taxed more heavily than the rest of us.

There are many directions this conversation could go, but I think one issue that often gets ignored is who is affected most by increasing taxes for the wealthy. Obviously, the 'middle class' (whatever that is) Americans are affected as they have to pay however much less in taxes that the wealthy are paying on their behalf. Also, the wealthy are affected because they are seeing less return for their labor. However, the biggest impact on increasing taxes for the wealthy will, ironically, fall upon the poor.

How is this possible? How can taxing the rich place a larger burden on those less fortunate? Because non-profit organizations that give aid to the poor rely heavily on the donations of the rich. If the rich have incrementally less money to give, those non-profit organizations set up for philanthropic purposes have less money to divvy out. The United Way, the Salvation Army, Food for the Poor--organizations such as these thrive on the wealthy benefactors and corporate donors who, incidentally, own 99% of the nations wealth. So, before we are so quick to tax the rich, we may want to stop a moment and ask ourselves who we are really taxing.