Our financial ills will never be settled till you fix it so every man will pay an income tax on what he earns, be it a farm, grocery store or municipal or government bonds — Will Rogers March 21,1933
Will’s words above were spoken during the heights of the depression but even then the rich were finding loopholes to avoid paying taxes. I have never understood how “unearned income” is treated any differently than the income the average guy has to sweat in order to earn. But for some reason, and I’m sure the politicians had their hand in it, “unearned income” is taxed at a lower rate called capital gains than when it is earned by the sweat of your brow.
To take advantage of this loophole most wealthy people do not actually have much income that is “earned”. That is they get their income from the wealth they already have. For instance more than 80% of Mr. Romney’s income was considered capital gains; that is how he and so many other rich guys can get away with paying less percentage of taxes than most of us.
I am going to go back to something I blogged about a year or more ago and say that as far as taxes are concerned that income should be considered income no matter where it comes from. If we just made that change it would go a long way toward reducing our deficits. It doesn’t matter if you got the money coming in because it was interest on bonds, dividends on stocks, or work digging a ditch; income is income.It doesn’t matter that your income is an inheritance, it is still income to you.
One of the things I like to emphasize on this blog is “Power to the people”. That is if we working stiffs would finally come to realize it we have the power to change many of these things that are currently so skewed toward the upper 1% of our population it could easily happen. That power is called the vote. I simply can’t understand why so many, especially those in the lower income levels vote in such low numbers. If only people realized the power they would have if they voted! Instead they let others convince them that “having their say” via the ballot box is a fruitless thing so why even bother. I am not a big believer in conspiracies but if I did this would be one of those areas.
As they say, it is just a matter of numbers. The very idea of democracy is that the power resides in the people. When one percent of the population have so much more say than the rest of us something is very wrong. They can and do control most of the money but they only control one percent of the vote. How can they maintain power with those odds?
But I’m just a simple guy so what do I know….