1/2/2015 5:48 PM
January 2nd, and I’ve already broken my first
resolution: to write and post every day. Well, yesterday was a holiday…and
other excuses.
And to ease into the year, I’ll keep this to a short number
of subjects. Not Ferguson, or Cuba, or any of the front-page subjects that are
already overloading you. I’m talking taxes and two obits. Maybe three.
This piece was in the LATimes Op-Ed section the day after
Christmas.
On-line, it’s titled “A tax system tilted towards the rich”,
but my print version was headlined “How to make taxes fair again”. And “fair”
is what it’s all about, isn’t it? The author, Joseph Anthony, compares the
equal incomes, and unequal federal taxation, of two couples through the years,
1993, 2000 and 2014, which happens to be the tax year we’re all getting ready
to file. The only difference is the income sources of the two couples. One gets
it from salaries, the other from long-term capital gains. Guess which one pays
less.
The article is great in the detailed analysis of a simple
example. I want to examine the effects in the larger picture, as a result of
the changing taxation on both of the couples.
Here are the three years, the same income each year, and the
taxations for the salaried and cap-gains couples:
1993 $150,000 $35,650
$34,158
2000 $150,000 $33,607
$23,025
2014 $150,000 $24,138
$8,385
Yes, it’s appalling how much the cap-gains couple’s taxation
falls off, especially as a result of the Bush tax cuts, but they got a
reduction during the Clinton years too.
But adjust these numbers for inflation, and what struck me
may astonish you.
Adjusting these numbers for inflation, using the calculatorat Bureau of Labor,
that $150,000 is worth less every year. Keeping all numbers in 1993 dollars:
1993 $150,000 $35,650
$34,158
2000 $125,871 $28,201
$19,321
2014 $91,784
$14,770 $5,131
What this means is that, even though the two couples both lost
about 39% of their income’ buying value in the past 21 years due to inflation, (a
little over a third of the value,) the buying power of the federal tax went
down over almost 60% for the salaried couple, and for the couple living off
long-term cap gains, federal tax value dropped by 85%. This is because, while
income values dropped only due to inflation, the tax value dropped due to
inflation combined with tax cuts.
And we wonder why so many public services, like schools,
hospitals, universities, research, infrastructure, so much of what made (notice
the use of past tense) America great. The investor in the markets no longer is
an investor in public America, only in private, for-profit, hardly-taxed
America.
Now, soon after this op-ed, the probably-all-Republican
AICPA assigned a minion to write the LA Times to argue that this is a goodthing. He finished by saying we can’t eliminate preferential treatment for capital. “We
tried it in the 1970’s, and the result was a stagnant economy.” Is he lying,
ignorant, forgetful (there was that little thing called the OPEC oil embargo in
1973,) or just an ideologue who thinks that…oh, wait, he’s obviously not
thinking.
I think I’ll leave the obits for another day. Those folks are
dead already, they can wait.
Monarch update: I released seven today. Two of them had
malformed wings, but the others sunned themselves for a while in my tree out
back, then took off. And this afternoon, another one came out, looking good,
which I’ll send on its way tomorrow. There’s still twenty-seven little green-and-gold
pupa hanging in the cages. Gonna be a busy January.
Welcome to 2015…and we’re off!
1/2/2015 7:34 PM
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