The great tax rate debate
To the Editor:
Is anyone else getting tired of the Great Tax Rate Debate? "Mitt Romney only pays 15 percent!!" "Warren Buffet's secretary pays double the rate he does!!"
In an earlier (perhaps more civilized?) time, gossiping about someone else's wealth was considered to be second only to bragging about one's own wealth in terms of boorishness and bad manners.
The only legitimate motivation we should have to ask any candidate about his/her taxes is to investigate possible evidence of undue influence. Using the information to browbeat those we have a political disagreement with for no other reason than to gin up hate and discontent is wrong and does the rest of us a disservice in our attempt to evaluate our nominees. It seems to me that it's all apples/oranges, anyway.
Everyone's financial situation is unique. None of us has the exact same income, living arrangement (house or rental), or investment income. Some of us supplement wages with income from dividends, income from rental properties, or cap gains from sales of stocks and real estate, while some live entirely on income from various investments. All of this is treated differently by the current tax code. Add to this the labyrinthine structure of the various credits, exemptions, allowances and "incentives" and you have a complex knot that no one can fully unravel. Attempting to compare the tax rates of individuals is a useless exercise that accomplishes nothing except stoking the fires of jealousy and envy. The complexity of the tax code, with it's different treatment of specific types of income and the (too) many schedules of exemptions and deductions make any talk of "So-and-so pays a lower tax rate than his/her employees" meaningless.
I'm all for clearing out the weeds in the tax code in favor of a cleaner, simpler schedule. Something like that was done once before in the Reagan years, for example. The overall rates were lowered and the new, lower rates were balanced by the elimination of several deductions and loopholes.
Perhaps, if politicians were more interested in the health of the American economy and the financial security of it's people, and less in their own political power and the welfare of their friends, and contributors............well, one can only hope. I'm not holding my breath.
In the meantime, I think it's absurd to be agitated over who is/is not paying their "fair share" (whatever that is), while nearly half of Americans pay no federal income tax, and many of those actually get a "refund" of tax that wasn't ever paid to begin with.
I'm told that I should be outraged that people like Warren Buffet and Mitt Romney pay "only" 15 percent as an "effective tax rate". So what? My own "effective tax rate" is somewhat under 9 percent. Further, I personally know people whose "effective tax rate" (boy, are we going to be sick of reading/hearing that before too long) is somewhere in the range of -5 percent or even -10 percent! In other words, they get a "return" well in excess of what little they paid in.
Funny how you don't hear anyone complaining about that.