Wednesday, January 25, 2012

Taxing My Patience

Okay, confession time. Despite the fact that i live in Louisiana, where politics is a favorite spectator sport, i hate politics.

Yes, really.

What has turned me this way? Politician season, of course.

Just like some women develop a hatred of a sport because the season sees all reason and sense depart her SO, the political season has turned me against politics because it seems to take the reason and sense out of people.

Take the current flap about taxes, and specifically about how much in taxes politicians pay.

The tax season will soon be upon us, and like all law abiding citizens of the US, politicians will file their tax returns.

We may not like it, we may complain loudly and often (and to deaf ears in Washington, where they've never figured out that they shouldn't spend money they don't have), but we will file so as not to end up in jail for tax evasion.

Each of us will also, i expect, seek every legal avenue available to us to pay the least amount possible.

It is only logical that we will seek to pay what we owe, and not a penny more. After all, only a very unwise person would purposefully set out to pay more than is owed.

This is true of Average Citizen, and it is also true of Average Politician. In fact, how many of us would want to elect a politician who ran his or her personal finances in such a way?

But this year, we seem to have hit a snag in the logic governing many people. They seem to think if you are rich, or a politician, you should pay more than you owe.

Let's get it straight, people. There are many forms of tax in the US, and income tax is only one of them. There are also inheritance taxes, sales taxes, use taxes, and a little something called capital gains tax.

Income and capital gains are considered two totally different things.

If you go to work and get a paycheck, that is income. It is taxed at your income tax rate, which increases as the amount you earn increases.

If you take some of that income, after you have paid your taxes, and you invest it in the stock market, and you make money, that is not income, that is a capital gain. You pay capital gains taxes on that, to the tune of 15%. That percentage has nothing to do with income, because a capital gain, an increase of an investment, is not considered an earned income.

Income is what you earn.

Likewise, if you own your own business, the profit from the business that you bring home is called income, and the amount you are taxed will be a percent that is based on what you earned.

If you take some of the income you earned from the business, after you pay income tax on it at your rate, and buy a piece of property as an investment, and then later sell it at a profit, that is not earned income, it is capital gains. The tax rate on capital gains stays the same, 15%.

Why is this so hard?

There are people making a huge deal out of how much politicians pay in taxes, specifically that they are only paying 15% capital gains tax on their capital gains.

Here's news for those people: the politicians pay the same as anyone else, their income tax rate on earned income, which rate varies depending on the size of the income, and 15% on any capital gains, which is not earned income.

If you had a capital gain on anything year before last, then you paid the 15% on that last year, too.

Now, if you think the capital gains tax rate needs to be increased, or needs to be on a sliding scale with wealthier people paying more, that is a totally different topic. You need to elect politicians who will get that written into the tax code.

Until that happens, you need to get over the fact that a politician, or anyone else, rich or poor, who had no income but only capital gains, paid 15%.

Those people paid what was owed, and that's enough, unless the tax code changes.

Move on to a more important topic in this election please. It's this kind of thing that made me hate politics.


Today is:

A Room of One's Own Day -- sponsored by Wellcat Holidays, for all of those who just want a space to call their own

Big Rock Day -- discovery of the Cullinan diamond (3,106 carets) this day in 1905

Conversion of St. Paul -- Christian

Dinner Party Day -- for Bobby Burns, of course

Dydd Santes Dwynwen -- Wales (For St. Dwynwen, the Welsh Valentines Day)

Feriae Sementivae -- Ancient Roman Calendar (a Feast of Spring, asking protection for seeds sown in the fall, and those to be sown in spring)

Festival of Constructive Energy -- another internet generated day with no explanations

G. F. Betico Croes Day -- Aruba

Macintosh Computer Day -- debuted this day in 1984

National Irish Coffee Day

National Voters' Day -- India

Observe the Weather Day -- a beautiful St. Paul's Conversion day means a prosperous year, precipitation means an expensive year, clouds mean much loss of livestock, and wind means war looms in the year ahead

Old Disting -- Norse Calendar (date approximate; a market day held at the same time as a sacrifice to the female powers.)

Robert Burns' Night -- Scotland; Newfoundland

St. Ananias of Damascus' Day (Saint who baptized St. Paul)

St. Tatiana's Day -- Russian Orthodox Church

Winter-een-mas -- a holiday for gamers, begun by Tim Buckley; through the 31st


Anniversaries Today:

Henry VIII marries Anne Boleyn, 1533 (secret wedding)
Moscow University is established, to coincide with St. Tatiana's Day, 1755


Birthdays Today:

Alicia Keys, 1981
China Kantner, 1971
Etta James, 1938
Corazon Aquino, 1933
Dean Jones, 1931
Edwin Newman, 1919
Virginia Woolf, 1882
William Somerset Maugham, 1874
Robert Burns, 1759


Today in History:

Founding of Sao Paulo, Brazil, 1554
Battle of Mikatagahara, in Japan; Takeda Shingen defeats Tokugawa Ieyasu, 1573
The Treaty of Utrecht marks the beginning of the Dutch Republic, 1579
Eliakam Spooner of Vermont patents the first seeding machine in the US, 1799
The first US engineering college opens, Rensselaer Polytechnic, Troy, NY, 1825
Sojourner Truth addresses the First Black Women's Rights Convention, in Akron, Ohio, 1851
Mendelssohn's "Wedding March" is first played, at the wedding of Queen Victoria's daughter Princess Victoria, to crown prince of Prussia, 1858
The soda fountain is patented by Gustavus Dows, 1870
Thomas Edison and Alexander Graham Bell form the Oriental Telephone Company, 1881
Bilu, a Russian Zionist organization, forms, 1882
Nellie Bly beats Phileas Fogg's time around world by 8 days (72 days), 1890
The first US transcontinental telephone call is made when Alexander Graham Bell in NY calls Thomas Watson in SF, 1915
The League of Nations is founded, 1919
The 1924 Winter Olympics opens in Chamonix, France (in the French Alps), inaugurating the Winter Olympic Games, 1924
The Guiding Light debuts on NBC radio from Chicago (in 1952 it moves to CBS television, where it remains until Sept. 18, 2009), 1937
At the Hollywood Athletic Club the first Emmy Awards are presented, 1949
The Clementine space probe launches, 1994
Russia almost launches a nuclear attack after it mistakes Black Brant XII, a Norwegian research rocket, for a US Trident missile, 1995
During a historic visit to Cuba, Pope John Paul II demands the release of political prisoners and political reforms while condemning US attempts to isolate the country, 1998
Three independent observing campaigns announce the discovery of OGLE-2005-BLG-390Lb through gravitational microlensing, the first cool rocky/icy extrasolar planet around a main-sequence star, 2006

2 comments:

  1. It isn't a question of whether or not the upper one percent is paying a legal amount in taxes(they probably are) it's whether or not the loopholes and special tax rates should exist in the first place. When corporations like GE, which make billions of dollars of profit a year, pay nothing in taxes (actually they get credits) someone must pick up the slack. Today that's the Middle Class. If we don't wise up our days as a democracy are over and we'll have become an oligarchy!

    ReplyDelete
  2. Stephen, i agree, but my point here is that the discussion needs to change. We need to be talking about a major overhaul of the tax system, not whether this person did his or her taxes correctly.

    ReplyDelete