Increasing taxation on large corporations and the extremely wealthy will create a more financially balanced society

The argument

Proponents of this view begin by rejecting the argument for the opposite policy. Decreasing taxes on the wealthy and corporations in the hopes that they will then distribute their excess profits to their employees is a pipe dream that has failed time and time again. The claim is empirical rather than moral: the promised redistribution was supposed to happen through wages and investment, and where the cuts were made the money largely did not travel that way. This method of taxation has only led to an increased wealth gap between the wealthiest people in society and everyone else, so the policy has not merely fallen short of its aim but has produced the opposite of it. The proposal that follows is bounded rather than sweeping. Corporations and individuals that make more than a certain amount in profits should be taxed accordingly — the threshold matters, because the measure is aimed at concentrated wealth rather than at earnings generally. This is not to rid others of wealth that they may have worked hard for; it is merely enforcement of good citizenship by equal and equitable contributions to society, so that as many people as possible can benefit from greater financial stability and a higher quality of life. Framed that way, the argument does not dispute that the wealth was earned; it disputes that earning it exempts the earner from contributing on the same terms as everyone else. The COVID-19 crisis has highlighted the desperate need for governments to reform economic policy in order to create a more stable financial environment for all citizens. The only alternative, proponents argue, is to stand by and watch as millions suffer under crippling debt and increasing unemployment and poverty.

Premises

Counter-arguments

It is not a good idea to increase taxes on corporations, as this increase will only cause them to export jobs and production overseas. It has been seen time and again that companies will simply pack up their manufacturing and instead of producing within their country of origin, will simply export hundreds of jobs to countries with lower corporate tax rates. This has had a hugely negative impact on the American economy. In addition, taxing wealthy individuals more is simply a punishment for being wealthy, which is just short of communistic and therefore, completely un-American.

Rejecting the premises

[Rejecting P1] The critique of trickle-down is the argument's most defensible element and is not what the conclusion needs. That cuts at the top have not delivered broad gains is a claim about one policy's failure, and a policy can fail without its reverse succeeding. The widening wealth gap also has drivers the premise never mentions — asset prices, housing and the returns to capital — which tax rates influence rather than determine. [Rejecting P2] "Equitable good citizenship" is an appeal rather than an argument, and the premise treats a moral characterisation as though it settled an economic question. The revenue claim is asserted without figures: how much a threshold-based levy would raise, and against what base, is precisely what the case requires. The pandemic framing then presents an urgent need as if it demonstrated that this instrument would meet it, when debt, unemployment and poverty are the problem rather than evidence about the remedy. [Rejecting C] The conclusion is also weaker than the position it sits under. Higher taxes on corporations and top incomes is a familiar policy within existing arrangements rather than a reform of capitalism, and the argument gives no account of what would change structurally.