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Lots of folks are yammering about the so-called "fiscal cliff" this country faces. It's another scare concocted by people in power to distract us from what's really going on, but that's another conversation entirely.

Meanwhile, back to the brink of the cliff: Many of the people yammering about the cliff are calling for "the wealthy" to pay more taxes.

Let's ballpark this: Suppose you make a nice living—a very, very nice living—and the government wants one third of your pie. Are you happy? No.

Suppose your pie is just a fraction of the size of the wealthy people's pie. Are you happy the government wants more of the rich people's pie?

You shouldn't be. Nobody should be happy about the government picking anybody's pocket.

I've got no problem with people earning money—lots of money—if they're going to be held to the same tax requirements that I am. When Mitt Romney begrudgingly released his tax returns during the presidential campaign, I couldn't help but note that the tax rate he effectively paid was half of what I pay. He withheld many more years than he released—in my opinion, because the return he released showed the highest effective rate.

Why was his tax rate half of mine? Because he's got an army of tax code specialists at his disposal. As a friend of mine who knows about such things told me, the phrase "wealth management" is all about understanding the tax code.

I have no wealth to manage. What little money I can sock away into a savings account earns so little interest that my savings probably don't keep up with inflation. But I get taxed on that interest, even if it's less than $20 a year, which it usually is. I'll bet Romney and the country's out-of-touch 1 percenters don't have to pay taxes on their earned interest. Or, if they do, I'll bet the rate at which they're taxed is far lower than my rate.

So, as someone who wants to propose a solution instead of just bitching, here's my proposal for the government to raise more revenue to help pull America back from the financial precipice: If you earn money from any source—if you earn money that you can put in your bank account or invest or spend or leave to your dependents—then you should be taxed on that money. The rich people should play by the same tax rules as I do. They should pay the same rate. There shouldn't be special loopholes for special kinds of money they earn. Income is income, and I don't care whether it comes from blue-collar labor, white-collar work or Wall Street luck. A buck's a buck.

When a guy like Warren Buffett says his effective tax rate is lower than his secretary's, something is woefully wrong. The fact that the rich skate while the poor get soaked is the kind of thing that winds up in North Korean propaganda films about the decadent West.

Comments

( 10 comments — Leave a comment )
nodressrehersal
Dec. 5th, 2012 12:52 am (UTC)
I agree in theory.

In reality, a 15% tax on $25,000 in income will have a much bigger negative impact on that family than a 15% tax on a family with $250,000 in income.

I think there has to be some kind of taxing on a curve - but a curve that bends in the opposite direction of what it bends now with all the benefits reaped by "wealth management" strategies.
patrick_vecchio
Dec. 5th, 2012 01:12 am (UTC)
Good point—but then again, you always were a numbers person. I should have thought of that. No wonder my idea was so easy to spit out.

I'm just pissed off that "the wealthy" play by different rules than I do. If I could get Mitt's 14 percent effective rate, I'd be dancing-in-the-streets happy.
tanadariel
Dec. 5th, 2012 03:27 am (UTC)
You speak Truth.

My mom works for a wealth management company. She sees firsthand what a low capital gains tax does. Hint: it lines pockets. And while she is fiscally conservative and votes as such, she is probably one of the few people in that company who supports a higher capital gains tax, because seriously, what the fuck*.

(*Those were not her words exactly)
patrick_vecchio
Dec. 5th, 2012 04:38 pm (UTC)
I think all of us would be happy if we could pay Mitt's 14 percent or 12 percent or whatever it was.
cwmackowski
Dec. 5th, 2012 09:09 am (UTC)
Don't knock the North Korean film industry, man. "Full Bellies, Empty Hearts" remains one of the most ingenious films ever, and I'm not sure any movie captures the 80s better than "Decadent Capitalist Pigs."
(Anonymous)
Dec. 5th, 2012 05:53 pm (UTC)
The theory that a lower tax rate on capital gains ecouraged investors to reinvest and thus drive and improve the economy may have been valid at some long-past point in time. Today all it does is allow the super-rich to amass fortunes that are obscene beyond measure, to pass on to future generations that will never contribute to society in any way, but will just keep generating the family wealth as their forebears did, at the expense of the working class.
patrick_vecchio
Dec. 5th, 2012 10:45 pm (UTC)
The only place the plutocracy drove the economy was into near-ruin four years ago.
gregorypeccary
Dec. 5th, 2012 06:24 pm (UTC)
I know several people who have no jobs and no income. They are, therefore, included in government statistical data showing them to be unemployed and paying no taxes. On first blush, a rather sad lot.

However, they live in 5,000 square foot homes and drive new cars. How? Because they or their parents put assets into trusts to which they are the beneficiaries. In the meantime, they or their children receive grants and scholarships based on need (remember, they have no income) due to how the system is designed.

Now, mind you, these people represent a very small percentage of the population. But, because of how the systmem is designed as a whole, and depending upon whether you can pay the right people to set up the proper accounts, there are ways to both have your cake and eat it, too.

Bon appetit!
patrick_vecchio
Dec. 5th, 2012 10:43 pm (UTC)
n the meantime, they or their children receive grants and scholarships based on need ...

Whatever happened to shame?
gregorypeccary
Dec. 5th, 2012 11:19 pm (UTC)
Shame?! These people are often boastful of how they've "played the system." Their connivances are badges of honor. These are most commonly the acts of the nouveau riche -- people who believe they're entitled to their position of arrogance despite having fallen into their lot through no effort of their own.

( 10 comments — Leave a comment )

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