THAT'S RICH Who's Not Paying Their Fair Share? 2003 EFFECTIVE TAX RATE George and Laura Bush 30.4% Typical Middle Class Families 20% John and Teresa Kerry 12.8% Source: Club for Growth ******************************* COMMENTARY A Wild and Crazy Guy By STEPHEN MOORE October 11, 2004; Page A18 Remember the classic 1970s comic routine from Steve Martin? You can make a million dollars and pay no taxes. First, find a million dollars. Then when the IRS comes knocking on your door demanding to know why you didn't pay your taxes, you just simply tell them you forgot. And then you say: "Well, excuse me." Well, John Kerry has his own version. It goes like this. You can make a billion dollars and pay almost no taxes. First, marry a billionaire. Second, hire a gaggle of tax accountants and lawyers to bring your tax rate down to about half what many middle-income families pay. Except for John Kerry, this is no gag; it's reality. According to the Kerrys' own tax records, and they have not released all of them, the couple had a combined income of $5.5 million last year and paid $704,000 in income taxes. That means their effective tax rate was a whopping 12.8%. And it was all (presumably) done legally. Now don't get me wrong: I'm not against people paying a 12.8% tax rate. Far from it. I just believe that all Americans -- even those who can't afford to hire tax attorneys to set up complicated trusts and find legal ways to stash income in other tax-sheltered investments like municipal bonds -- should have a shot at that kind of non-confiscatory tax rate. Under the current tax system the middle class pays far more than the Kerry tax rate. In fact, the average federal tax rate -- combined payroll and income tax -- for a middle-class family is closer to 20% or more. George W. and Laura Bush, who had an income one-tenth of the Kerrys', paid a tax rate of 30%. Of course, there is delicious irony in the Kerry family tax-return data. Here is the man who finds clever ways to reduce his own tax liability while voting for higher taxes on the middle class dozens of times in his Senate career. He even voted against the Bush tax cut that saves each middle-class family about $1,000. The Kerrys have unwittingly made the case for what George W. Bush says he wants to do: radically simplify and flatten out the tax code. Dick Armey and Steve Forbes have persuasively argued over the years that America should have a flat tax with a rate of 17% to 19%. John Kerry has consistently opposed a flat tax, because he says it would be a tax break for the rich. But the truth is with a 19% flat tax, some rich people with lavish tax shelters, like John Kerry, would pay more taxes. I calculate that the Kerrys would pay another $500,000 of taxes if we had a flat tax. So before John Kerry is given the opportunity to raise taxes again on American workers, shouldn't he and Teresa at least pay their fair share? http://online.wsj.com/article/0,,SB109744732385441499,00.html
No wonder he and his wife were so relectant to share their tax returns. So even if he takes the top rate up 5% he'll still not be paying as much as the middle class whom he is fighting for.
None of this has anything to do with the tax breaks. Kerry has a good accountant does that mean that because he pays a small percentage of tax that rolling back the tax cuts for people who make over 200,000 a year? This doesn't show his policy ideas in a bad light at all. In fact it's not even a discussion of policy or ideas.
I don't like Bush, nor do I care for the RNC's campaign tactics. But other than that, your post was excellent!!!
So is what Kerry is saying is that he can better disperse/spend (like to charities) his money than the Federal governemnt? Well that sounds like a great idea! Why didn't someone ever have that idea before that individuals should get more money and the governemtn less? Shoot, let Kerry re-phrase that: "I am fighting for the middle class and my family! I'm John Kerry and I support this message"
Why is Kerry's effective rate so low??? Unless the article writer can answer this, he's just blowing smoke. Did Kerry have huge deductible (and out of pocket expenses)? Did he have losses of other years? Did he make huge charitable contributions? Or was it some fancy schmancy tax reduction scheme? Unless we know the reasons, we can simply draw NO conclusions as to whether his tax rate was just. This article is even less informative than most of the mass emails we see. (though $5m income's not too shabby for the champion of the working man)...
Wouldn't Kerry's stance that he would roll back tax cuts mean that he's increasing taxes on himself? No one should suggest that taking a tax break is illegal or unethical. That's BS. However, there is only one party suggesting removing some of those 'loopholes' and breaks, and it isn't the GOP.
Yes, in fact he said so directly in the debate Friday. He pointed at the president and said (paraphrasing) "He and I can afford to pay more taxes, but the middle class is getting squeezed." Exactly. This is just another smoke screen by the RNC. The GOP is obviously and desperately throwing as much **** against the wall as they can, hoping enough sticks to see their man reelected. It SHOULD be, but it isn't.
The one that comes directly to mind is the loophole that allows companies to incorporate offshore to avoid US taxes.
I disagree. I actually think this has a LOT to do with tax breaks and who Kerry's proposed tax increases are really aimed at. IF (and that's a big if), there are not legitimate reasons for such a low effective tax rate (i.e. charitable contributions), then this is a major point of frustration. Not just for Kerry, but for the uber-wealthy in general. IF (and, again, a big if) he is using crazy tax shelters designed by expensive accountants and lawyers to shield his income, it's a little disingenious to "raise" taxes on the wealthy. In fact, what he will end up doing is raising taxes on the people that earn $200-500K/year and the rest of the people above that income range will continue to use sham tax shelters to avoid paying taxes on their earnings. W made a comment about that at some point...That the really rich people will never suffer the consequences of higher tax rates anyway. Pretty damn annoying for him to tell some of us to pay higher taxes b/c we can "afford" it and for him to dodge his tax responsibilites. (again, subject to that big ol' IF) Just a point of clarification for my edification, Andy. This is not what Kerry refers to when he says our tax structure encourages outsourcing, is it? Because incorporating offshore and outsourcing are obviously two different things. I've always wondered what exactly he is referring to when he says the tax structure rewards outsourcing.
Kerry mentioned closing some loopholes for corporations, so maybe that would help. It's not wrong to use loopholes that are there. It may be wrong that they are there in the first place, but that's not what the article was saying. If he was dodging responsibilities he should be prosecuted.
You are right, those are two different things. I was commenting on bnb's question regarding the loopholes that Kerry wants to close. As far as tax policies that encourage outsourcing, here is a link. http://www.johnkerry.com/pdf/pr_2004_0907.pdf
Maybe instead of looking for corporate loopholes, he should have focused on how a family can make $5.5M in profits and only pay $700k in taxes. The $5.5M is net of expenses of their holdings. It's either profits from businesses, wages from jobs, dividents, interest, self-employed income (like him speaking), etc. But the only effect of him closing corporporate loop holes would be to increase their $5.5M of income.
Hopefully I wasn't misunderstood, but in case I was, let me clarify, I am not implying he is using illegal methods to dodge taxes. If you believe there are no unintended consequences of laws and that everyone follow the spirit of the law, then you are right, there is nothing wrong with using loopholes. Most of the loopholes that exist (I hope) are there intentionally to encourage people to do certain activities. However, I've known a few tax advisors...and I've seen the kind of structures they put together that allow people to dodge taxes while staying within the LETTER of the law but far from being within the SPIRIT of the law. That is what many wealthy people do. And that is why just raising marginal taxes may not actually impact the people that it should. Instead, it may just put a squeeze on the people that are trying to get to the crazy rich level, but can't yet afford hiring personal tax advisors. Andy, thanks for the link. I'll check it out. edit: Ok, I just read it. Pretty frustrating. There is no data and no specific information in there. It's little more than rhetoric. Politics sucks.
which, again, raises the question....How did he do this???? He fills out the same forms as the rest of us. Is subject to the same tax code. Was it that he invested in municipal bonds?? Should those be eliminated then??? (thereby increasing municipal borrowing costs). Was it charitable or political donations? Or was it something more sinister? We don't know. ANd the article doesn't tell us. So we can't draw ANY conclusions from its revelations -- other than a peek into the John-John's financial affairs -- and yet another starting point for the same 'ol same 'ol platitudes.
