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TAXES: ‘Fairness’ is nothing but political expediency

Letter by Craig Chilton, Bonney Lake on Feb. 28, 2012 at 1:25 pm with 42 Comments »
February 28, 2012 1:25 pm

Over the last month, there has been a tax debate created largely by Mitt Romney paying 13.9 percent on his 2010 income. Katie Baird and many Democrats criticized Romney for paying such a low rate.

In 2004, presidential candidate John Kerry paid 13.1 percent on this 2003 income. Did the Democrats complain then? How about Katie Baird?

Our progressive tax system has not changed since 2004. Higher income earners pay at a higher tax rate than lower income earners. In fact, a new study by the Heritage Foundation found the lower 49.5 percent of taxpayers pay no income tax. Yes, they do pay payroll taxes, but so does everybody.

Furthermore, this notion that wages and capital gains should be treated the same for tax purposes is preposterous. You don’t just take a risk with investments. You take a huge risk.

Human capital? Employment is over 90%. Is there a 90 percent success rate with stocks?

So what’s the beef? Fairness. All of a sudden our tax system is unfair. We hear, “Is this fair?” over and over. Is this an argument based on the facts or is it just political expediency? I would suggest it is the latter.

A recent cartoon of President Obama giving a political speech says it all: “I won’t allow the half of Americans who pay no taxes to bear the burden of the other half who aren’t paying their fair share.”

Leave a comment Comments → 42
  1. Pacman33 says:

    A leftist’s ‘fair share’ means …. yours.

    To the left, a tax rate meeting their definition of ‘fair share’ is …

    … More.

  2. Craig, You are wrong about “everybody” paying “payroll taxes”.

    Mitt Romney does not. I believe all of his income is from non-employment sources, so he pays no payroll tax at all.

  3. No it’s not preposterous to tax investment and earned income the same. Reagan certainly didn’t think it was. All these GOP candidates keep claiming to be the most like Reagan but they seem to have forgotten that part. The risk taken by investors is voluntary. They do it for higher returns. The money they risk on those investments isn’t the money they need to put food on the table and a roof over their heads. And if it is they’re stupid.

  4. concernedtacoma7 says:

    3 comments in and the left shifts topics. This letter is about the hypocrisy of the left. Focus.

  5. All of a sudden our tax system is unfair.

    You do know that the economy, and the deficit, have become a major emphasis since 2004 don’t you? And, you do know that since the Bush tax cuts’ sunset provision wasn’t until 2010 so there is a reason why the top tax rate wasn’t a major focus in 2004.

  6. From the Letter, “this notion that wages and capital gains should be treated the same for tax purposes is preposterous.”

    From Murigen, “No it’s not preposterous to tax investment and earned income the same. Reagan certainly didn’t think it was.”

    concerned…, There is no “topic shift”. Murigen’s comment it directly on topic as is mine. It really seems like you are the only one here who needs to “Focus” on the topic my friend.

  7. old_benjamin says:

    Note that investment income is not the same as ordinary income. What is invested has already been taxed once for most of us. For that reason alone, it deserves a lower rate of taxation.

  8. Heritage Foundation?

    Oh, we KNOW that they are not related to the wealthy, are they?

  9. The tax system was unfair when Kerry ran and it’s unfair now.

    old_ben…the invested money shouldn’t be taxed at all…the profit it makes should be and taxed at the same rate as a paycheck.

  10. I think Craig has misquoted Kerry’s income tax level. His Senate salary – $175,000 – would definitely be in a higher tax level. As the Republicans were fond of pointing out in 2004, most of Kerry’s money was his wife’s money. Thus SHE would possibly be paying the investor rates, but not Kerry’s salary.

    Maybe Craig can share where he got his information. Heitage Foundation, by chance?

  11. aislander says:

    ImLarry: No. You’re not…

  12. sandblower says:

    Oh my! Another Chilton epiphany to ignore. 50% for everything over $200K adjusted. Now that’s fair!

  13. concernedtacoma7 says:

    Yeah, let’s take all the money from the rich and sprinkle it to everyone else!
    What a selfish liberal perspective. The motivation of wealth is key to America’s success and innovation.

    This BHO sponsored attack on wealth is a nation embarrassment.

  14. Hey Old Ben – Admit it what your trying to say is untrue and I’m being kind.

    “Note that investment income is not the same as ordinary income. What is invested has already been taxed once for most of us. For that reason alone, it deserves a lower rate of taxation.”

    In the tax code this type of income is called a capital GAIN for a reason. Meaning that you only pay tax on the money you make on your investment. So you are NOT being double taxed. But then Old Ben you know this but just don’t have a good counter argument so well you try to make something up.

  15. sandblower says:

    afret, ben has no clue and I have told him that before. He keeps on keeping on with his nonsense.

  16. The GOP idea of a fair tax would be NO Taxes for those earning over a million dollars.

  17. concernedtacoma7 says:

    Yet dem and repub congress leave it alone. Obviously the theroric you bought into makes no economic sense.

    It is taxed once at the corporate level, then immediately taxed at the individual level. It is already taxed. Grow up. Save up some cash and invest. You will change your ignorant progressive tune while helping a business expand or get a start.

  18. concernedtacoma7 says:

    “This philosophical point is fundamental. But even if you accept Mr. Geithner’s case that the well-to-do must pay more for their presumed “privilege” of being governed, his story ignores the empirical fact that they already do pay a record share of income taxes, even relative to their share of income. According to the Census Bureau, the share of income received by the top 5% of American households is now 21.5%, up from 21.4% in the 1990s. Their share of income taxes has risen to 59% under President Obama from 52% under President Clinton. This despite the fact that the top tax rate was five points higher in the Clinton years.

    If you go further back to the pre-Reagan days, when the top tax rate was 70%, the story becomes even more dramatic. Under the four presidents of that era, the income share of the top 5% was 16.8% and their share of the income tax was 36%. In other words, the share of income received by the top 5% has risen 28% and their share of income taxes has risen 64%”

    WSJ today. The rich pay enough. The modern argument is manifested by the reelect BHO and a Canadian magazine. Either way the progressives have been used.

  19. “Yeah, let’s take all the money from the rich and sprinkle it to everyone else!
    What a selfish liberal perspective.”

    Only one problem. That is NOT the liberal perspective. It is a strawman argument from the king of the strawmen. 35% of earnings isn’t “ALL”. There was a time in our country, a more conservative time, when the taxation was far more than 35%.

    “the top 5% of American households is now 21.5%, up from 21.4% in the 1990s.”

    It increased a whole 1/10th of 1%???????

    How in the world are the top earners feeding their families with such an injustice???????

  20. old_benjamin says:

    afret, thanks for correcting that error I didn’t make. I didn’t say investment income was double taxed. I said the investment itself was already taxed for most of us. That is in fact sufficent reason for taxing investments at a lower rate. I don’t have time to explain that to you, but, in future I will type more slowly just for you.

  21. Your condescension as a rhetorical tactic isn’t based in factual evidence. “I don’t have time to explain that to you, but, in future I will type more slowly just for you.”

    My income is taxed, that money is taxed again when I buy something, the Merchant is taxed on their income through B&O, then their employees’ income is taxed. To make the argument that somehow investment income is special because it is “taxed already” one has to ignore the reality that almost all money is taxed multiple times.

  22. old_benjamin says:

    Think income tax, bB, income tax. That’s the context of this thread. As for condescension, your concern for afret is indeed touching, if somewhat selective.

    That almost all money is taxed multiple times justifies nothing except government greed. All income should be “special,” i.e., taxed once and once only. Of course, that would seriously compromise the Statist goal of making us all equally miserable. Here’s to it’s soon demise.

  23. CT7 and O_Ben
    How is the money one earns from investment any different than money earned as wages?

    Wages are paid by companies that have paid taxes on their money.

    Wage earners then pay taxes on their wages.

    But income from investments should not be taxed because the company has already paid taxes on it.

    Something is fundamentally flawed about this picture.

    Larry – CT7 prefers to see money being taken from the working and middle classes and given to the rich to send more US jobs overseas.

  24. concernedtacoma7 says:

    Kard- the number you quoted was income. Yes, it stayed flat. But the share of taxes paid has shot up.

    You are welcome for the summary. Reading comprehension problem today?

    Shows our tax system is more progressive then now, even with lower rates.

  25. old_benjamin says:

    xring, see my last post. The thing that is flawed is the U.S. Tax Code. The government incentivizes all sorts of things via tax law that are contradictory, stupid, and just plain crazy. Don’t expect rationality in any discussion of the current system. It’s like expecting a rational discussion among flat earth proponents.

  26. The beef is with denial of facts and what works.

    The fact is, there have been a huge increase in inequality, a great flow of wealth upwards and stagnation of lower and middle class relative incomes. The fact is, this is a problem that needs solution (unless you are the type that has friends who own NASCAR teams, of course).

    What works is redistribution; AFAIK, the competing proposal is “tricle down”; that turned into a golden shower, and deregulation that turned into a meltdown.

    We constantly keep getting these letters from people who do not care to read a little before making their silly points (“bunch of people do not pay taxes”). Rational people look up critique of their ideas first, before spewing them out in public. Use Google and Wikipedia, do not embarrass yourselves.

  27. old_benjamin says:

    The bunch that don’t pay INCOME taxes is very close to 50 percent. Look it up yourself, wise guy.

  28. concernedtacoma7 says:

    “What works is redistribution” in Venezuela and the USSR it worked so well. You are asking for govt sponsored theft.

    The riches at the top mean nothing to the median income earner, except for some jealousy.

    As I proved the top 5% has had their share of the nation’s wealth stay the same, while paying more taxes.

    The only issue here is rhetoric.

  29. Excellent letter, Craig.

    Old_B and cr7 – RIGHT ON! You beat me to the punch. I guess rouss didn’t read your previous post cr7.

    rouss – middle and lower class income has stagnated due to outsourcing overseas and a lack of education. It has nothing to do with the wealthy who you want to blame and so does Obama. Stop with the left wing propaganda. Deregulation of the banks was passed by Clinton in 1999. Try using a “k” next time you use the word trickle. You will appear to be a little smarter than you really are.

  30. concerned – you can use my given name – Larry. It’s been used several dozen times on these threads without my permission, so I’ve decided to take away the children’s fun and adopt Lyle’s attitude of “I use my real name, why don’t you?”

    So, why don’t you?

    Since you didn’t say much more about your “source” than the WSJ, which has become a house organ for the TeaParty, via Murdock, it’s difficult to determine who did the math this time and how the bastardized it. Bottom line, the wealthy are paying lower taxes than they ever have and they want to pay less.

  31. concernedtacoma7 says:

    The rich are paying less? As you love to say, prove it. Don’t show the tax rates, show what they have actually paid over the last few decades. As we have seen a 90% top bracket meant nothing, no one paid it and revenues were lower.

    http://online.wsj.com/article/SB10001424052970204653604577247800370322294.html?mod=WSJ_Opinion_LEADTop

  32. old_benjamin says:

    Nearly 50 percent of us pay NO federal income tax. It’s hard to get any lower than none.

  33. Pacman33 says:

    The bottom line is, the half of American who don’t pay any taxes have absolutely no place adding their “2 cents” to this subject. Whether one believes the rich should be paying more or less becomes irrelevant when the discussion is polluted by those who contribute nothing at all.

    When it comes to the idea of “fairness”, this discussion is simply absurd until the half of Americans, who pay nothing, pay at least ‘something’. Regardless of how little of a contribution ‘something’ would be, it would be at least enough for these individuals to justify their participation in such a discussion.

  34. sandblower says:

    pac33 says: “The bottom line is, the half of American who don’t pay any taxes have absolutely no place adding their “2 cents” to this subject.”

    It is so very characteristic of the extreme right to say that the poor should have no voice. Let the rich speak for all of us is a big part of their mantra. pac33 is one of their mouthpieces.

  35. “half of American who don’t pay any taxes have absolutely no place adding their “2 cents” to this subject.”

    Forward into the 19th century!

  36. sandblower says:

    ehill, when somebody writes stuff like that one really has to wonder. pac33 has been around here long enough that we more or less know what to expect. He/she seems to excel putting forth noxious commentary about the downtrodden.

  37. Pacman33 says:

    Oh my ….. absolutely amazing. Above is the perfect example of the pathetic, shameless attitude that is destroying our nation. These people completely reject the concept of personal responsibility. They lack the principles and integrity to see how despicable their position is. Their sad, even foreign rhetoric is exactly why we need to restore personal responsibility in America.

    ehill and sandblower are the same creeps who go to potlucks empty-handed yet criticize the dishes that others took the liberty of bringing as they fill their plates and stuff their faces.

    They are the same creeps that go out to eat when someone else is treating and don’t care, this is what’s happened in this country, not only are they ordering anything they want lobster, steak, etc . … they’re bitching about the size of the tip that the person is leaving.

    We have become a nation of takers rather than a nation of givers. It is only reasonable that everyone should contribute SOMETHING, even if it’s a dollar. Some have suggested that only those who pay taxes should be able to vote. Whether or not that is a good idea is subject to debate, but it would certainly reduce the ability of politicians to “buy votes” by creating more entitlement programs and government give-aways.

    Everyone should pay at least some taxes, otherwise there is no check on government spending. If you’re paying zero in taxes, you’re going to want everything from the government because you’re not paying for it.

  38. concernedtacoma7 says:

    I have been paying and filing taxes since I was 16. Hopefully someone on this board can tell me if you fall into the zero fed income bracket, don’t you still have to file?

  39. You can’t google, I see.
    “U.S. citizens and residents who realize gross income in excess of a specified amount (adjusted annually for inflation) are required by law to file Federal income tax returns (and pay remaining income taxes if applicable).”
    Source: http://en.wikipedia.org/wiki/Tax_return_(United_States)
    (less than 60 sec)

  40. Old_ben,
    The tax code is flawed because it is skewed in favor of the rich.

    The reason the lower 47% don’t pay income tax is because they do not earn enough.

    I find in appalling that conservatives thank it is okay for millionaires, billionaires, and corporations to not pay taxes but view the poor not paying taxed as a national disaster.

    CT7 – the 47% have to file returns to get their withholdings back.
    Such a simple concept. Wonder why you did not figure it out yourself.

  41. concernedtacoma7 says:

    It was a rhetorical question in response to roussir’s post that poor people should not file returns. Made no sense, still doesn’t. I guess accountability and responsibility are terms lost on the left.

  42. roussir: FYI, you will find that concerned…7 rarely, if EVER, posts anything that is backed-up by any real facts. He almost NEVER posts links or any other references to add credence to his alleged “facts”.

    Your speculation that concerned…7 “can’t google” may be closer to the truth than we know, since he seems more likely to come up with some lame excuse like “It was a rhetorical question” or that he supposedly “posted the link weeks ago.” Maybe he really can’t figure out how to google!

    Like I said, concerned…7 would rather make-up some lame excuse than just take a few seconds to find and post the supporting link, or do a quick google to do his own research.

    concerned…7 does not feel that “accountability and responsibility are terms” that apply to anything he posts on these blogs. Yet, you will often see concerned…7 challenge others here to provide “proof” which is something he feels is not required of him in return.

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