March 21, 2013 Leave a comment
Essentially, it’s easier for people who already have money to make more money, because when you have a lot of money, it makes more money for you without you having to do much of anything.
Here is an example I DON’T necessarily have a problem with.
Someone with a modest $500,000 sitting aside could presumably make $35,000 in “capital gains” during a decent year of investing. The $35,000 would be taxed at 15%, ensuring $29,750 in pure profit. Enough for many people to live off of. It’s also more than most people make in a year who are showing up to work every day, punching a time clock, working overtime and working their asses off to make ends meet.
Is that 15% tax rate fair? Maybe? It’s an honest question to ask, and I wish people would discuss this as opposed to taking sides and having uninformed or poorly thought out opinions.
Now, when you imagine someone like Mitt Romney (or picture George Soros if you’re a republican) having capital gains of $42,000,000 during the past two years and paying 15% on that $42,000,000 – all generated through capital gains, ie, wealth creating wealth – you really have to wonder if that is fair.
15% of $42,000,000 is $6.3 million dollars.
That means “Mitt Soros” still has $35.7 million of pure profit after taxes. That pure profit will be added to whatever heaping amount he already has, and next year it will make even more wealth, and more wealth the following year, and more wealth the year after that …. on and on and on. Does $6.3 million in taxes even show up as a blip on his radar screen? Doubtful. So why are we pretending like 15% is a lot of money to pay for someone of his caliber, and why are poor/middle class people, many of whom are the very same suckling off Uncle Sams tentacle-like teets via food stamps, reduced rent, medicare, medicaid or other government programs – rushing to the defense of these ultra rich??? Seriously, what is your answer? I honestly don’t get it. Do the Mitt Romney and George Soros types need you to rush to their defense?
The surprising reality is that 15% hasn’t always been the capital gains tax rate. Towards the end of WWI, for example, capital gains for top earners were taxed at a 73%. Presumably this incredibly high rate was due to the fact that our country was at war and needed to pay for it somehow. Conversely, we’ve been in two wars for much of the past ten years and have receivedtax cuts as opposed to tax increases.
Maybe shipping a bunch of horses and bayonets to France was more expensive than operating apache helicopters, nuclear subs, predator drones, aircraft carriers, jets, etc etc etc
Interestingly, Ronald Reagan thought these capital gains should be taxed at 28% for the top earners of our society. Before his reform act in 1986 it was 50%. I agree with Reagan though, 28% is not a bad idea for the ultra wealthy during peacetime. But it isn’t peacetime in our country and we forget that because we’re so far removed from reality.
For anyone not paying attention, the Bush tax cuts are the real reason our country is F’d right now. It has nothing to do with Obama and his policies. It’s simply because we didn’t pay for two wars by raising taxes like we should have. We sacrificed by going shopping and driving Hummers instead of tightening our belts. By blaming Obama for the so-called fiscal nightmare (which has led to hundreds of thousands of government job cuts, which has f’d our economy even further) is just ignorant. I know republicans want to be on the other side and oppose everything Obama does. Fair enough. But at a certain point it is your responsibility as a citizen of this country to take a look at the facts, instead of grandstanding with Rush Limbaugh, Sean Hannity, Paul Ryan and Mitt Romney.
Wealthy people, led by Paul Ryan types (like Mitt, also born into wealth), continue to declare that they are overtaxed. Are they? Paul Ryan even goes so far to say that capital gains taxes should be eliminated altogether. Under the Ryan plan “Mitt Soros” would pay $0 in taxes on the $42,000,000 he earned for DOING NOTHING.
Here is another question worth considering, and I don’t have the answer. Does this minimal tax on the wealthy make it harder for the rest of us to accumulate wealth when the rich are essentially shuffling money between themselves?
In America, liberals and conservatives, progressives and tea partiers, Greens and libertarians can all appreciate and respect hard work. I am as liberal and progressive as the sky is blue. However, when I left my job at Watershed last year, I made the conscious decision not to go on food stamps or collect unemployment because I felt that if I worked hard enough, I could scrape enough dollars together to get by. I didn’t want taxpayers to give me a break when I didn’t need one. Weird, huh? Most conservatives don’t think liberals are capable of thinking like that. But, I don’t think everyone has to go the route I did and I think food stamps and unemployment benefits should be available for everyone.
But my point is, conservatives don’t own the “pull yourself up by your bootstraps” mentality. With their support of this ridiculous tax rate for the wealthy, they are demonstrating they’ve completely abandoned anything resembling this notion.
Why do so many conservatives believe that rich people should get a pass on hard work, just because they are already rich? It’s insanity, and make no mistake, a 15% tax rate on wealth, especially during a time of war, is a pass on hard work and a pass on the responsibility that comes with being wealthy. It’s welfare for the rich. It’s unnecessary. During previous wars the wealthy have stepped up, and it sure as sh*t didn’t cripple them. If you think 15% is fair for millionaires, then you’re a huge proponent for the most f***ed up welfare program that I have ever heard of, and I am going to fight this, figuratively speaking of course.
The story that inspired this diatribe:
“A major — although, perhaps not widely understood — result of the 2003 tax cuts was to lower the maximum tax rate on capital gains and qualified dividends to 15 percent. This category makes up the lion’s share of income for the richest Americans.”
Tax Reform Acts.
Mike Phillips is a mad genius and entrepeneur living in Portland, Oregon. Once the bass player for the pop-punk phenomenon of a band known as The Young Immortals, he has evolved into the lead singer of the Portland Music Award nominated band The Fenbi International Superstars. He is also the CEO of The Neo Com Group, a literary and performance arts marketing firm that represents the likes of Bill Carter, Todd Grimson, and more. In 2011, Mike contributed an essay to the charity based book Children of Mercy: Tales and Teachings From The World of Independent Music. You can enlist his services right here at The Neo Com Group.