MyWAG
Tuesday, November 15, 2005
  Re... How tax relief works

Re... How tax relief works

by: Sen Frist

What comes first, investors and companies or families?

As stated by Sen Frist: (emphasis mine).

Taxes on capital gains and dividends -- which we eventually need to eliminate altogether -- also need close attention. By seizing a portion of the money that investors make when a company increases in value or hands out cash, these taxes place a tremendous burden on those who put aside money for the future. Furthermore, since a majority of households now own stock it's hard to argue that this type of tax cut benefits the rich alone -- nearly half of all income tax returns that reported capital gains and dividend income came from households with adjusted gross incomes of less than $50,000.

Any tax places a burden on those who want the money for the future. Does Frist consider the burden on families?

Frist just said:

Furthermore, since a majority of households now own stock it's hard to argue that this type of tax cut benefits the rich alone-- nearly half of all income tax returns that reported capital gains and dividend income came from households with adjusted gross incomes of less than $50,000.

Well, if nearly half of all income tax returns showed capital gains...that must mean that more than half do not show capital gains.

Plus, considering Frist uses math to show us where nearly half of all income tax returns had capital gains, I wonder if he would be so kind as to show us where the majority of the capital gains went? I wonder if nearly half of the capital gains went?

This chart is from rationrevolution:

Notice how the percentage changes to capital as you get higher up the income scale. If Frist could eliminate the tax on capital gains then Cheney would have paid taxes on only $800,000 out of a total income of $35,000,000.

Cheney's potential tax burden (in bold) below:

$35 million times 35% equals $12,250,000 if he were taxed on all income.

$35 million times 12% equals $4,200,000 if there was a flat tax.

$800 thousand times 35% equals $280,000 if he was taxed at 35% on labor only.

What do you think Cheney wants to pay?

Another thing to consider is the pay differential from top to bottom:

Over the past 20 years the salaries of corporate executives have grown by a factor of more than 10. In 1982 the average corporate executive was paid about 42 times the salary of the average employee. In 2002 that figure had increased to 500 times the compensation of the average employee.

Wake up sheep.

 
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