"Fairness" or "Cause" Matters?
Date: Monday , October 03, 2011
The act of tithing, is one of the greatest acts of obedience a Christian can practice. The purpose of tithing was to teach the Christians to show God our desire to put him first in their lives. It also advises Christians to share a part of their income with the Church for the well being of the community. It is some thing similar that President Barack Obama is trying to attempt by implementing “Buffet Rule” where the richest Americans pay higher taxes to help cut soaring U.S. deficits by more than $3 trillion. By credible estimates, this would raise roughly $20 billion a year. While the move holds well, this move can back fire the U.S. economy.
Obama’s assertion has been based on element of "fairness," which is an emotional rather than an analytical basis. Tax hike on the rich would be self-defeating because it would undermine job creation and discourage people from working harder to make more money. If the tax is levied upon the richest Americans, it is going to confine the huge investment made by them, as huge earning means huge tax payment. This tax will even discourage the country's most productive entrepreneurs from creating jobs for millions. A study on The Importance of Startups in Job Creation and Job Destruction reveals that, both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing one million jobs net combined per year. By contrast, in their first year, new firms add an average of three million jobs.
A few percentage rise in the tax rate might not only affect the availability of VC funding, but will discourage the initial goal of the entrepreneurs of earning millions of dollars. As we all know Silicon Valley is the hotspot for most Indians to start their dream startup and pull off. Given the U.S.' massive budget deficit, raising more money from people who have been very successful, the decision on “Buffet Rule”can be given a second thought. They can find alternatives to limit deductions for wealthier filers and close loopholes in existing policies. If someone is serving the community, its ok not to be a good shepherd who do not tith. At this point of time for the U.S economy its not the element of fairness that matters, but the cause that you stand for matters.