LEE’S SUMMIT, JANUARY 28, 2012 – Rasmussen reports that Fifty-five percent of likely voters agree with the president that wealthy Americans should pay “at least” 30% of their income in federal taxes. To be fair, forty-nine percent of likely voters also think that 30% should be the maximum rate for all taxes combined (federal, state and local government).
In 1970 my mother brought me to America. It was the land of opportunity. It was the land where hard work, and success was not punished. It was the land where a hard working immigrant could do much better than back home; because American was fair to those who worked hard and earned a good living.
I have a fundamental problem of [logic] with the 55% of likely voters. Let’s take my least favorite candidate at this point, Mitt Romney, and talk about his current tax return. He paid less than 15% of his income in taxes. At first glance you say; that’s not fair. I paid more than that myself. Let’s take another of my least favorite people, Warren Buffet, and the ever present commentary that he pays less in taxes than his secretary.
Let’s say I’m a hard working person, that finds a great job and I get a paycheck of $1 million a year. It is [earned income] and therefore is taxed at the appropriate rate. In 2011, using the schedule for Married Filing Jointly, assuming that after all the deductions this person has $1 million in adjusted gross income, the taxes would be $319,871.50 or 32% of his income.
Now, let’s assume that this person saves his money for several years and builds up an investment next egg for $5 million dollars. If he lived on $200k a year, he’d save $500k a year, so it took him 10 years to get there.
This person finds a good investment guru and is able to get a 10% return on his investment annually. The $5 million (money he saved after he paid the original 32% in income taxes) and now has available to invest, yield $500k per year of Capital Gains or qualified Dividends. This is taxed, again, at 15% so you have a tax rate much lower than when your earnings were originally earned and taxed.
Let’s take an investment firm like so many here in Kansas City that buys a business. Let’s further assume that a group of investors fund a start-up company here in Lee’s Summit. They have $30 million in sales, they have 60 employees generating $2.8 million in salaries and wages, which generate $280k in Federal Earned Income Tax; and a great deal of economic activity that benefits Lee’s Summit.
This millionaire that 55% of likely voters considers a “TAX CHEAT” like Mitt Romney and the benevolent Warren Buffet (benevolent because he admits he pays less in taxes than his secretary) has already paid his fair share of taxes; when he earned his income the first time. He saved money, invested it, and is generating economic activity that benefits 60 families, and thousands of customers as well as hundreds of suppliers.
Is the American dream over? Has it been so sullied that we despise wealth generation? Has America become so lost that it cannot see that economic activity is what provides jobs; the jobs that created the largest middle class in the history of the world? Is the rugged individualism that build this country from the Atlantic to the Pacific, from Canada to Mexico been exchanged for the weak dependents on government handouts?
America, what has happened to us?
The Lee’s Summit Conservative