LETTER: Bush tax cuts unfair, favor rich

  • Posted: Tuesday, October 9, 2012 7:23 a.m.

Letís talk federal income tax. Say a retired comfortable person has $1 million in dividends and interest. Say a working executive has the same million. but all in earned income. With no deductions of any kind, the retired guy gets to keep $850,000. The working stiff who puts in 60 hours a week and lot of stress, gets to keep about $600,000. Fair? In other words, hard work, even for the well-to-do, doesnít pay as well as playing golf and collecting dividends and gains. How about the guy who earns $75,000 a year and works hard for it. Heís 50-years-old and wants to save for a comfortable retirement, but has three kids who want to go to college, and theyíre smart enough to get into top schools. Say $50,000 a year for each of them for four years. Heís in a 30 percent bracket, where the retired guy with the same $75,000 is in a 15 percent bracket. The so-called Bush tax cuts clearly favored the well-to-do. By a lot. They donít have to be super wealthy, but how much money in dividends and gains will the $75,000 working stiff have? $4,000? $6,000? How much does he save with the preferential dividends/gain treatment save him? Only amounts to 8 percent of his income to which the savings would apply. Now, Romney wants to eliminate federal estate tax altogether. Itís a $3 million exemption now, but we need to perpetuate the rich. Get it?

Why in the world wonít the Democrats illustrate this? Why is it fair to tax earned income at a higher rate then dividends and capital gains? Beats me.

Edwin Bowers

Aiken

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