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Friday, September 7, 2012

Capital Vices / Cardinal Sins

"You know, I think it's about envy. I think it's about class warfare." (Mitt Romney, The Today Show, January 2012)

"Of course there are exemptions for those who make money from capital gains, which is legal....so vote for someone to change the laws...each person, rich, middle class and poor look for all of the exemptions and tax loop holes that they can find. If not for those spending money, our economy would be crashing more...stop the class war fare and the envy that is being broadcast by the O supporters." (Another informative Facebook rant from the right)
The first quote above is of course the day when Mitt Romney carried the hot button trigger issue of class warfare to the national stage known as network television. This was back when the Occupy movement had reached fever pitch, and this was Mitt's take on the whole thing...that the Occupy movement is driven by envy.

The second quote above was written by an ordinary citizen and Romney/Ryan supporter, and this delightful rant was a Facebook response to a person (okay, it was me) who said that it's unfair that mega-billionaires pay only 14% in taxes just because the income is in the form of capital gains.

As you can see, this woman is citing that it is NOT unfair, and the reason it is NOT unfair is because it is LEGAL.

Huh? Yes. Yes, I know it is legal. Then comes her puzzling follow up, where she retorts, "so vote for someone to change the laws." Um...that's what we ARE doing, isn't it? One reason that I'm voting for President Obama because he's stated that he's going to work to reverse the obscene Bush tax cuts to the top 1% the same way that President Clinton did.

Put another way, this particular Romney/Ryan supporter is essentially demanding that I should be supporting the guys pushing to KEEP THE LAW that allows so little tax revenue to come from the top 1% because that's legal, while also snobbily telling me that if I don't like it, well if I want change then I should vote for the guy who is going to CHANGE THE LAW...
 
Dizzying. Truly. This is unfortunately what every single discussion with a right wing voter sounds like, and I am telling you, dear readers, that if ANYONE could give me SOMETHING to believe in from the right then I would gladly change my mind.

I know that this essay isn't a strident, confident oratory. Fact is I don't know much about big finance, and it's like thirty years later and I'm still not sure I get the end of "Trading Places." Stocks, bonds, capital investment, fancy tax forms, lawyers. It's not my world. I'm guessing it's probably not yours, either.

But you still "get it," right?

You still get that if you earn $N income as your pay check, you pay regular income tax. But if you earn $N in capital gains, then you get unbelievably incredible breaks. You don't need to be an expert in, well, anything, to understand that's grossly one-sided in favor of the extraordinarily opulent, right?

Now of course that's grossly under-simplified, but I've been studying this topic for weeks and all I can say is that a deep understanding of the tax law is not for the faint of heart. At the end of this is a collection of links, if you wish to self-educate, just follow the money and you'll learn some astonishing things about the capital gains tax. It's amazing. Why, it's almost as if those who stand to gain the most money out of it were the ones that wrote the rules!

It's kind of the whole point that the millions of Americans who are pissed off right now about the income tax inequality in this country don't need to be experts well-versed in the intricacies of Wall Street. It's so obvious -- tax income the same for everyone, no cheatsies.

THAT is what the Occupy movement is about, Mr. Romney. Not "envy." Americans are pissed off because it's "legal."

If that doesn't piss you off, you're just not paying attention. Anything you say, King. It's okay, King.

No more King!




Further Reading:

How Stuff Works: http://money.howstuffworks.com/personal-finance/personal-income-taxes/capital-gains-tax4.htm

IRS - Capital Gains and Losses: http://www.irs.gov/taxtopics/tc409.html

Investopedia - "A Long-Term Mindset Meets the Dreaded Capital Gains Tax": http://www.investopedia.com/articles/00/102300.asp

InvestorGuide. "Tax Basics: Explanation of the Capital Gains Tax and Related Issues" - http://www.investorguide.com/igu-article-855-tax-basics-explanation-of-the-capital-gains-tax-and-related-issues.html

Tax Learning Center from CCH - "Capital Gains Tax Rate" http://fidelity.cch.com/c60s10d459.asp

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