Everybody says they love the idea of living in an equal society. But I don't. An equal society might be nice and might be an improvement over our current society but I'd really love to live in an equitable society. These words are fairly confusing since they look and sound similar but an equal society is one where everybody is on the same level legally. Which sounds great but an equitable society is one where everybody is treated fairly, or justly. A good way to distinguish the difference is using schools. In an equal society all children are treated the same in school. In an equitable society all children are given the amount of help and support they need to succeed. So if a child has a learning disability they get more support than a child without a learning disability. This is how our schools are supposed to work so there's some good news.
I posted a link on my facebook page of Fox News interviewing the Romney Policy Director and having him dodge the questions asked of him which was surprising since he was on a network friendly to him and his candidate. The questions were about Romney's tax policy and how he isn't telling Americans which tax loopholes he would close, something the Fox News reporter thought Americans have a right to know before they cast their votes. I would agree. But this intrigued me... What does Mitt Romney actually say his tax policy would be as president if he won't answer such an important question?
I went to his campaign website to investigate and in his introduction the Romney campaign says their are two questions at stake in how we address taxes "How will we generate sufficient revenue to balance our budget without discouraging economic activity, and will the burden of taxation fall equitably on all Americans?" And this is where we run into a problem. See Romney uses the wrong word for his policy. He means "will the burden of taxation fall equally on all Americans?" because that's what his proposal is. He proposes a flatter tax rate for all Americans to try and make all Americans pay the same tax rate. That is treating us all equal. If he wants to treat us all equitable then he must agree more with President Obama and raise taxes on those like the President and himself who have so much money.
There is some argument about who are the "rich" in this country. The President has named it at families who make $250,000 and up and individuals who make $200,000 and up. There can be some argument for this when you consider things like children and costs of college and things of that nature and I won't get into naming what I would consider rich. But if we take that definition and look at Romney's tax plan we can see something quite astounding.
Romney wants to keep the capital gains tax at 15%. Personally I think it should move from a flat rate to an increasing rate as you earn more money. Keeping it low for low capital gains helps the economy. It supports small business owners and encourages investment in small businesses. Small businesses need the investment the most. I'm for a low capital gains tax to a point. And surprisingly, in a way, Romney agrees with the idea that capital gains should be tiered like our normal taxes. He wants to keep capital gains at 15% unless you fall into a certain population of Americans in which case your capital gains tax would be 0%.
Which population does Mr. Romney think shouldn't pay taxes on capital gains? People who earn less than $200,000 a year in capital gains. Basically anybody not considered the upper class by Obama right? So no taxes (in capital gains) for the poor and middle class right? Isn't that what that means? Well that's certainly what Romney would probably like you to believe and it is true. The poor and the middle class wouldn't be paying any capital gains taxes. But neither would the rich. Romney doesn't say that if those making over $200,000 a year from capital gains would pay taxes on that first $200,000 but my bet is that they wouldn't because that wouldn't be equal which as I've already said is what Romney means to say. It would be more equitable for them to pay taxes on that first $200,000 but that's not his goal. Maybe I'm wrong but I think the odds are in my favor that I'm right.
But I digress. Do you have any idea how much money you'd have to have to make $200,000 in capital gains in a year? Let's put it like this: According to this website the average dividend in the S&P 500 is 2.08%. The same website lists the average dividend in the NASDAQ exchange to be 1.18%. And The Dow Jones has an average dividend of 2.89%. Since the Dow Jones has the highest average dividend let's use them. In order to make over $200,000 in capital gains in the Dow Jones you have to have an average of $6,920,416 invested ($6,920,416 X .0289=$200,000.02). And if I'm right about that first $200,000 not being taxed then a person with almost $7,000,000 invested in the stock market would pay $0.003 in taxes on that income. Less than one penny. This is a person who has to have such a ridiculous amount of wealth that they have almost $7,000,000 tied up in stocks. Tell me, does that sound equitable? Now if I'm wrong at that first $200,000 does become taxable then they'd pay $30,000.003 in taxes on that income. Which, for somebody with $7,000,000 to spare isn't even noticeable.
Now people who run small businesses, particulartly start ups could probably use a tax forgiveness where they pay 0% in taxes on capital gains. But that's because most start up owners have put most of their money into their business and will continue to pour money into their business for a while. The amount they're actually making would be very little since whatever they make probably goes right back into their company. That is an equitable tax rate. One that recognizes people risking all they have to own a business and employ people. Those are the real job creators of the economy. They are people who don't make very much money at all. The rich invest to get richer and the rich don't spend a larger percent of their money on goods than the rest of us. They buy more expensive items. But they don't really buy a whole lot more than the majority of Americans. A rich person doesn't need more food to survive, if they go out they might buy the most expensive thing on the menu but they're not really spending all that much more than the average American at the table next to them.
I hope Mr. Romney realizes that he uses the wrong word soon. Because he wants an equal society. I want a equitable society. A society that is just.
I posted a link on my facebook page of Fox News interviewing the Romney Policy Director and having him dodge the questions asked of him which was surprising since he was on a network friendly to him and his candidate. The questions were about Romney's tax policy and how he isn't telling Americans which tax loopholes he would close, something the Fox News reporter thought Americans have a right to know before they cast their votes. I would agree. But this intrigued me... What does Mitt Romney actually say his tax policy would be as president if he won't answer such an important question?
I went to his campaign website to investigate and in his introduction the Romney campaign says their are two questions at stake in how we address taxes "How will we generate sufficient revenue to balance our budget without discouraging economic activity, and will the burden of taxation fall equitably on all Americans?" And this is where we run into a problem. See Romney uses the wrong word for his policy. He means "will the burden of taxation fall equally on all Americans?" because that's what his proposal is. He proposes a flatter tax rate for all Americans to try and make all Americans pay the same tax rate. That is treating us all equal. If he wants to treat us all equitable then he must agree more with President Obama and raise taxes on those like the President and himself who have so much money.
There is some argument about who are the "rich" in this country. The President has named it at families who make $250,000 and up and individuals who make $200,000 and up. There can be some argument for this when you consider things like children and costs of college and things of that nature and I won't get into naming what I would consider rich. But if we take that definition and look at Romney's tax plan we can see something quite astounding.
Romney wants to keep the capital gains tax at 15%. Personally I think it should move from a flat rate to an increasing rate as you earn more money. Keeping it low for low capital gains helps the economy. It supports small business owners and encourages investment in small businesses. Small businesses need the investment the most. I'm for a low capital gains tax to a point. And surprisingly, in a way, Romney agrees with the idea that capital gains should be tiered like our normal taxes. He wants to keep capital gains at 15% unless you fall into a certain population of Americans in which case your capital gains tax would be 0%.
Which population does Mr. Romney think shouldn't pay taxes on capital gains? People who earn less than $200,000 a year in capital gains. Basically anybody not considered the upper class by Obama right? So no taxes (in capital gains) for the poor and middle class right? Isn't that what that means? Well that's certainly what Romney would probably like you to believe and it is true. The poor and the middle class wouldn't be paying any capital gains taxes. But neither would the rich. Romney doesn't say that if those making over $200,000 a year from capital gains would pay taxes on that first $200,000 but my bet is that they wouldn't because that wouldn't be equal which as I've already said is what Romney means to say. It would be more equitable for them to pay taxes on that first $200,000 but that's not his goal. Maybe I'm wrong but I think the odds are in my favor that I'm right.
But I digress. Do you have any idea how much money you'd have to have to make $200,000 in capital gains in a year? Let's put it like this: According to this website the average dividend in the S&P 500 is 2.08%. The same website lists the average dividend in the NASDAQ exchange to be 1.18%. And The Dow Jones has an average dividend of 2.89%. Since the Dow Jones has the highest average dividend let's use them. In order to make over $200,000 in capital gains in the Dow Jones you have to have an average of $6,920,416 invested ($6,920,416 X .0289=$200,000.02). And if I'm right about that first $200,000 not being taxed then a person with almost $7,000,000 invested in the stock market would pay $0.003 in taxes on that income. Less than one penny. This is a person who has to have such a ridiculous amount of wealth that they have almost $7,000,000 tied up in stocks. Tell me, does that sound equitable? Now if I'm wrong at that first $200,000 does become taxable then they'd pay $30,000.003 in taxes on that income. Which, for somebody with $7,000,000 to spare isn't even noticeable.
Now people who run small businesses, particulartly start ups could probably use a tax forgiveness where they pay 0% in taxes on capital gains. But that's because most start up owners have put most of their money into their business and will continue to pour money into their business for a while. The amount they're actually making would be very little since whatever they make probably goes right back into their company. That is an equitable tax rate. One that recognizes people risking all they have to own a business and employ people. Those are the real job creators of the economy. They are people who don't make very much money at all. The rich invest to get richer and the rich don't spend a larger percent of their money on goods than the rest of us. They buy more expensive items. But they don't really buy a whole lot more than the majority of Americans. A rich person doesn't need more food to survive, if they go out they might buy the most expensive thing on the menu but they're not really spending all that much more than the average American at the table next to them.
I hope Mr. Romney realizes that he uses the wrong word soon. Because he wants an equal society. I want a equitable society. A society that is just.
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