Taxes: Rich Win, Poor Lose and Middle Suffers

While we have had unprecedented spending by the current administration, the tax burden has clearly shifted from big business and the wealthy to the middle class. The worst of it all is our kids are going to be hurt as the burden of rising debt and interest shifts. Where is the loud opposition from our representatives? It's quiet. They're not listening to us when over 75% of us think big companies, PACS and political lobbyists have too much power; Why? One does not have to be a Ph.D. in Finance to understand the "restructuring of tax." It principally benefits the most wealthy of Americans. They also happen to be the lion's share of campaign contributors to both parties. A $1,000 donation is small potatoes and gets a big benefit. For many American's, that's two weeks' take home pay.

The majority of the wealthiest of Americans earn a large portion of their income from assets held, not by working. My work has me advising many of these individuals. Say they hold interests in a company with a $2 million portfolio in assets made up of real property and marketable securities (stocks and bonds) that generates a combined yield of 8%. That's $160,000 in annual income. If the dividend tax is reduced from 20% to 15%, that's not 5% lower, it’s a 25% reduction. So the tax savings is $8,000 annually BEFORE capital gains tax reductions (sale of property that has increased in value) and lowered income taxes. Since 2001, the tax cuts for the wealthiest have amounted to TRILLIONS of dollars because these folks' wealth make up more than a third of all federal tax revenues. Their tax SAVINGS are greater than most people actually take home each year. Yet, more taxes are continuing to be cut ... and so is spending for programs from which we all benefit.

So we now borrow from countries like China and Japan who hold 25% of our nation's debt. That is interest and principle that is owed by us and our kids and our kids' kids. Funny thing... actually sad. Less money makes it to our state for pesky things like education, police and fire/rescue, healthcare... You get the idea. We pay at the local level by absorbing higher property taxes. This is why education and social security are at risk and healthcare for all will not happen, unless we demand change. I suspect most wealthy elected officials are not too motivated to do much about this. But you can with your vote and your actions. Do it!