This is Tom. He’s the wonderful 99%
This is Dick. He’s the evil 1%.
President Obama will make that 1% "pay his fair share". Now that's worth a vote, is it not?
Tom makes $60K from USA Company. Tom pays 33% taxes. Tom takes home $40K.
Dick makes $6 million from USA Company. Dick pays 33% taxes. Dick takes home $4 million.
This is called INCOME tax.
Tom and Dick may write stuff off like child expenses or mortgages. Political parties play ping pong with this to encourage certain activity, like going green and discourage other activity like outsourcing labor. They do this to steer Tom and Dick in positive directions.
Tom and Dick have accountants to study these laws and account for their money to write things off. Clearly Dick will have many accountants. Tom may file his own taxes as it's not much to account for.
The government has the IRS, a sort of “money police” who makes sure Tom and Dick do not cheat. Usually the IRS money police do not chase Tom since he makes too little to warrant a big investigation. Dick however is like a fat pig walking in front of a bacon factory!
So far so good. Things are FAIR.
Now say Tom and Dick run into Steve. Steve has an idea to make computers for home use, but he needs money to make his idea a reality. Tom and Dick decide to invest 100% of their INCOME in Steve’s idea.
If Steve’s idea breaks even, Tom’s $40K remains $40K and Dick’s $4 million remains $4 million. Nothing happens.
If Steve’s idea bombs, Tom loses $40K and Dick loses $4 million. They both are broke.
But if Steve’s idea yields profit, say doubling the investment:
Tom’s $40K makes $40K profit for a total of $80K.
Dicks’ $4 million makes $4 million profit for a total of $8 million.
This is not INCOME. This is called capital GAIN. (Your capital made a gain.) Both pays 15% tax on the capital GAIN.
15% off Tom’s $40K gain = $34K or $75K total.
15% off Dick’s $4 million gain is $3.4 million or $7.5 million total.
Still very FAIR. Everyone pays evenly. Clearly the 1% pay MORE because they make more.
The government taxes capital GAINs less to encourage investing. With Tom and Dick assuming all the risk but forced to share the gain, why would they invest in Steve’s crazy home computer idea at all? The bigger the capital gains tax, the better to simply keep their money.
While not impossible for Steve to find funds with fewer investors out there, why deliberately make it more difficult for people like him in an already difficult economy? Do we not want more Steves out there creating more jobs when he opens his new PC company? Do we not want more Steves out there creating more USA products for us to buy?
Maybe President Obama wants to raise the capital gains tax "To pay our debt!". However, if the tax was raised to 100%, the increased revenue couldn’t pay off our current debt. It would make sense if all we needed were a few billion more to ask the rich to kick in a bit more. But we're looking at a hole that is unsustainable. It is irrelevant if George Bush or George Jetson created the debt. The debt is there and we must deal with it.
Maybe President Obama believes the current government can do better with our money. It would make sense if they were the generation that got us to the moon using only 12K of computer power and no home computers from Steve. But this government is the lowest approval rated one in generations by both parties!
So President Obama believes this:
And this:
Regarding the 2nd impossible math equation, there can be only 1 of 2 possibilities.
One, President Obama is an idiot. But if George Bush was an idiot and we’ve had enough idiots in the White House, then none can vote for President Obama.
Two, President Obama knows he’s lying. Why would a smart person behave foolishly? Possibly pitting one American against another will stir discourse to earn votes. Is this “Hope and Change” rhetoric President promised? No. If President failed in his promises, none can vote for President Obama.
The true equation and argument is not about Dick the rich 1% or Tom the poor 99%. It’s not about "fair share". It’s about government spending, more specifically an incompetent government spending our money.
Even if candidate Mitt Romney does NOTHING about the economy or deficit. If the ONLY thing he does is NOT pit one American against another...
Wouldn't that be a better choice?
No comments:
Post a Comment