Josh's Weblog: Tax “The Rich”

Tax “The Rich”

So, much analysis has been done on Theresa Heinz's publicized portions of her tax return and it while I'm sure she intended to deflect criticism, I think she is sure to draw it.

Bottom line from the Wall Street Journal article “:Teresa's Fair Share:”

Mrs. Kerry paid $627,150 in taxes, for an overall average federal tax rate of only 12.4% on her $5.07 million in total income.

How could that be? Because $2.78 million of that income came from tax-exempt interest on “state, municipal and public entity bonds.” Finally we get a picture of the rich fatcats that her party appears to despise: people that can afford to invest in such tax avoidance schemes. The top 50% of taxpayers paid an average rate of 15.9%, and the average rate of all people that paid taxes is 14.2%. Both numbers are significantly higher than hers.

So the Kerry solution is to tax everyone making more than $200,000 at higher rates, except for the fact that such shelters would still exist. Half of her income would still be tax-exempt, but the remainder would be taxed at a higher rate.

So who really suffers? The Journal article today lays it out in black & white:

The people who won't be able to escape these higher rates are two-earner couples on mid-career salaries, or small-business owners who pay taxes as subchapter S companies at individual rates, or pensioners who've saved all their lives to build a nest egg and are now living off dividends. Mr. Kerry calls these people “the rich,” but we know a lot of them who are decidedly middle-class and who certainly can't afford the five homes that the Kerrys own.

Frankly, I like the idea of a nationwide sales tax at 10%, a statewide one at 5%, with no exceptions for any purpose, and a constitutional amendment illegalizing income tax and property tax. Let the government run on its ability to enhance productivity and perhaps use fees, and not its ability to siphon away the lifeblood of the economy.

Josh Poulson

Posted Monday, Oct 18 2004 12:08 PM