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June 4, 2012

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Letter to the editor:

Abiding by tax law is not praiseworthy

Richard Rychtarik, Las Vegas

Monday, Feb. 13, 2012 | 2:01 a.m.

In his Feb. 4 letter to the editor, Michael Kreps implies that people like Mitt Romney pay a 15 percent income tax because it’s the law. The implication is that all tax laws are good laws. Many laws exist simply because they can, not because they benefit most Americans.

Much of Romney’s wealth and income come from carried interest and dividends. Tax on private equity-carried interest is set at 15 percent, a rate that benefits only a few wealthy individuals. Romney is not a true venture capitalist yet he received the same tax treatment. Venture capitalists are those who risk much of their capital by investing a great deal of their money into startup ventures.

A private equity firm like Bain Capital speculates by injecting a relatively small amount of money into companies with assets but little cash. They leverage the assets and borrow more money in the company’s name, not their own. If the “restructuring” is successful they make enormous profits while paying only a 15 percent tax. It’s like winning the lottery, without all that financial risk and high income tax rate. Many like Romney with great wealth want to perpetuate it forever. Romney’s $100 million family trust fund avoided paying any “gift” taxes, an option not generally available to working-class Americans. The wealthy keep money off shore, push to eliminate any “death tax” or insist that their “capital gains” be taxed at only 15 percent.

All these situations exist because they can, not because they are of real benefit to America. They arise at the behest of those with money, and money buys power and privilege.

Discussion: 28 comments so far…

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  1. By RefNV (Re Freeman)
    Feb. 13, 2012
    4:33 a.m.
    Flag

    When people complain about tax rates being low in their estimation like this writer they never suggest what that tax rate should be on money that's already been taxed once by the government. Should it be taxed at 20%? 30%? 40%? What is your goal besides complaining Richard? The tax rates as is garnered 18% tax revenue as a share of GDP prior to the recession which matches our historical average tax revenue collection amount. Right now, we have 17% fewer tax filers than in 2008 and the top 1% earn 34% less than in 2008. The employment-population ratio is down from 63% in the early 2000's to 58.5%, a drop of approximately 14 million people from the workforce. The number of people out of work combined with the top 1% of wage earners earning less has caused our tax revenue as a share of GDP to drop to 14.5%. So we should just arbitrarily tax a specific group more, why not everyone? Nearly half of the U.S. population (49.5 percent) does not pay any federal income taxes. Why not collect more from them?

    This writer's aim is more Obama class warfare that he started last year, a tactic that won't solve anything. Nice try Richard.

  2. By dipstick
    Feb. 13, 2012
    4:39 a.m.
    Flag

    richard; the republicans claim they want revenue reform but i havent seen anything they've DONE to correct it, other than to take the money from the middle class. romney is a vulture capitalist who has never created jobs but eliminated them. americans dont want to make the sacrifices to keep this nation strong and vibrant, they prefer to disappear like the roman and greek empires.

  3. By ressince73 (Gary Lind)
    Feb. 13, 2012
    4:54 a.m.
    Flag

    You left one thing out "Future". The "job creators" aren't creating jobs.

  4. By PISCES41 (Jim Weber)
    Feb. 13, 2012
    5:09 a.m.
    Flag

    By their nature, tax laws often have to cover situations that apply only to a few. Few of us know or even care what the tax rate on income above $370,000 is. It only applies to less than 2% of us. But that 2% may be a nearly unanimous chorus that the tax rate should be lower and they have the money and power to back it up.

    Another example is the fact that one can deduct the mortgage interest for a second home from taxable income. This again applies to very few. More of us have problems even paying the mortgage interest on our first and only home.

    In some recent debates we've been told that we dare not increase the taxes on "job creators". I'm open-minded about that, but it is difficult for me to discover the connection between Swiss bank accounts and investments in the Cayman Islands with American jobs.

  5. By wtplv (Michael Casler)
    Feb. 13, 2012
    6:35 a.m.
    Flag

    This argument always amazes me. The false narratives abound.

    Generally, 15 % capital Gains taxes are paid on any profit, called 'gains' on invested money held for more than 2 years.

    In 2006, only 12.9 % of Americans with investments reported 'gains' subject to this 15 % tax. President Obama's proposal to raise capital gains taxes exempts anyone from the higher taxes that makes less than $ 250,000, which reduces the 12.9 % to a much lower % of people paying capital gains taxes. The bottom lines is that unless we had 300 million, millionaires in the country, raising the capital gains rate won't bring in enough revenue to be more than a drop in the bucket.

    D's present this false narrative that taxing the rich more can deal with a 16 TRILLION dollar debt and deficit spending of 1 TRILLION dollars or more every year.

    R's present the false narrative that reducing taxes will spur the economy and that can deal with 16 TRILLION dollar debt and deficit spending of 1 TRILLION dollars or more every year.

    NO NO NO NO! That big a debt and deficit can ONLY be dealt with by re-writing the income tax code, raising taxes on all Americans and addressing the SS and Medicare programs. Nothing else is going to do it, whether it be 'taxing the rich' or 'lowering taxes'.

    Michael

  6. By lvfacts101 (Jerry Fink)
    Feb. 13, 2012
    6:47 a.m.
    Flag

    Wow! dipstick & Simmons are sooo smart when it comes to business, I bet they have risked their own money often in starting them. NOT! As a former business owner who put at risk and invested his own money, I can tell these two haven't a clue as to what it takes, not only to start a business, but to have it become successful. Let the two functionally illiterates open their tax returns for the past few years and we'll see just how "fair" their share of federal taxes were. No doubt we'll find they are on government assistance and are shaking in their little pajamies over the possibility they might have to rely on their own ignorant selves for subsistance. As for Simmons, he shows his true colors as he continues his racist and bigoted comments.

  7. By abostonboy (Kevin Lustig)
    Feb. 13, 2012
    8:36 a.m.
    Flag

    If I have money (whether I earned that money or I inherited it), invest that money, and get a return on my investment (which, by definition, is not "earned income"), the highest federal tax rate I will pay is 15% (assuming it qualifies as long-term capital gains or dividends).

    If I have nothing but a job, get up every morning and work my butt off, whether it's a manual labor blue collar job or a behind the desk white collar job, and am compensated for my labor (which, by definition, is "earned income"), the highest federal tax rate I will pay is 35% (depending on how well I am compensated).

    Our current system rewards the wealthy with lower tax rates, just for doing something with their money. Our current system punishes the working class with higher tax rates, just for working. The law is the law, and I have zero problems with people who follow it. But the law here seems back-ass-wards.

  8. By KillerB
    Feb. 13, 2012
    8:46 a.m.
    Flag

    "All these situations exist because they can, not because they are of real benefit to America. They arise at the behest of those with money, and money buys power and privilege."

    Rychtarik -- excellent letter! Your points seem valid, and all courtesy of the best Congress money can buy.

    "Our current system punishes the working class with higher tax rates, just for working."

    abostonboy -- a big cause for our Revolutionary War was taxation without representation. Seems we're back into that same situation again, and with a Congress back to operating on the Golden Rule -- whoever has the gold makes the rules.

    "[The law] has placed the collective force in the service of those who wish to traffic, without risk, and without scruple, in the persons, the liberty, and the property of others; it has converted plunder into a right, that it may protect it, and lawful defense into a crime, that it may punish it." -- Frederic Bastiat, 1850 "The Law"

  9. By ksand99 (Kevin Sandoval)
    Feb. 13, 2012
    9:16 a.m.
    Flag

    Talk about false narratives...

    If the federal government raised the tax rate on dividends and capital gains "to 20% for individuals making more than $200,000 (and couples making more than $250,000) that could raise roughly $107 billion over a decade, the Treasury Department estimated last year. The rate increase would raise less if it were limited to just those making more than $1 million."

    You might say, "But $107 billion over a decade? That's nothing!" And, you know, I might agree with you a bit on that.

    So we turn to the Buffet rule, and the revenue increases over a decade range from $400-500 billion. That's better, right?

    But then turn to the GOP freaking out about a few million in funding for NPR, and suddenly $107 billion sounds pretty good, doesn't it?

    No one... let me repeat that... NO ONE is claiming that raising the capital gains tax rate is the entire solution to our problem. NO ONE is claiming that it's even substantial, in the long term. But if one's going to introduce and advance the debt panic narrative, I think they need to get realistic.

    What's realistic? Well, rewriting our entire tax code, regardless of the party in control of the Congress OR the White House... that's unrealistic. Were it realistic, we would have seen it in the middle of the last decade, when the GOP ran the White House and the Congress. We would have seen it late last decade when the Democrats ran both the White House and the Congress. Guess what... it didn't happen!

    So be realistic and focus on small reforms that can make a dent, or be the eternal contrarian whining that it's never enough? I'll take the small reforms over gridlock and whining, thanks.

  10. By TEA (Mark Traeger)
    Feb. 13, 2012
    9:25 a.m.
    Flag

    It's another beeeuuutifaul day in Greece. People out rejoicing in the streets. Many of them must be getting drunk, cuz I see them carrying around bottles of booze. I didn't know they have drinking laws like here.

    Why all the glee? Didn't they just cut 15,000 civil service jobs and reduce the minimum wage by 15% (I think) I'm watchin' it on the news right now. Wait...wait...that guy ain't drinking that bottle. He's lightin' it on fire. Geeeez...he just threw it at a bunch of cops.

    Richard R...what's going on over there? Isn't Greece supposed to be one of the utopian countries that all thesun socialist/marxist bloggers crow about?

    BTW...in case anyone missed them yesterday. Here are a few things I offered for profit and entertainment:

    I'll bet anyone $10 that 1. Harry Reid won't even bring the Obama budget up for a vote. Or 2. It won't get even one senate DEM vote.

    The looser delivers the $10 to the LV Sun front desk in a legal size envelope.

    This is one of the most enlightening you-tube videos ever made. Funny too.

    http://www.youtube.com/watch?v=661pi6K-8......

    Got this in an email. It reminded me of the "die-hard" Obama supporters on thesun blogs. It takes place on election day 2008.

    Enjoy.

    http://www.youtube.com/watch?v=e_JJLLfTR......

  11. By TEA (Mark Traeger)
    Feb. 13, 2012
    9:29 a.m.
    Flag

    i know,iknow. beautiful

  12. By ksand99 (Kevin Sandoval)
    Feb. 13, 2012
    9:59 a.m.
    Flag

    And now is where I remind people that even GOP/tea party Golden Boy Paul Ryan's "Greek austerity budget plan" had us laden with $23 trillion in debt in 2021.

    And Ryan's revered among tea party types, so I just have to chuckle when they try to tell us Obama's turning us into Greece.

  13. By boftx
    Feb. 13, 2012
    10:46 a.m.
    Flag

    What does Harry Reid's tax return look like? He claims that he is as wealthy as he is by making good investments. Does that imply that he, too, is taking full advantage of a 15% tax rate on capital gains?

  14. By TEA (Mark Traeger)
    Feb. 13, 2012
    11:15 a.m.
    Flag

    Are you joking? Of course he is.

    Also...You have to love the willfully ignorant people that believe "Greece" could never happen here.

    70.5 percent of federal spending now goes to dependence-creating programs, up dramatically from 28.3 percent in 1962, and 48.5 percent in 1990.
    Source: OMB. Historical Tables: Budget of the U.S. Gov. Fiscal year 2012,2011

    Dependence creating programs in U.S. Dependence creating programs in Greece. What's the diff? What do you think will happen when the "takers" outnumber the "makers"?

  15. By mike_kerns (mike kerns)
    Feb. 13, 2012
    1:46 p.m.
    Flag

    Excellent letter. The rich boy made good Romney did not even pay at his taxpayer subsidized rate of 15% on his known income, He was big enough to pay 13.9% though. No wonder his campaign is financed by 17 billionaire's who were born into privilege. VULTURES FLOCK TOGETHER.

  16. By askmrmark (Mark Anthony)
    Feb. 13, 2012
    2:34 p.m.
    Flag

    The job creators would create jobs if the leader of the nation (Obama and the dems) would settle in on his tax plans for the future. Having ObamaCare and other unfunded programs plus the continued spending spree, have job creators nervous about how much of their "wealth" will be left to create jobs, once the Obama Tax man is done with them.

    Having spent his entire presidency spending and golfing, he has not figured out how anyone will be able pay for all these bailouts, handouts and paybacks to his Union and Banker buddies.

    if there is no incentive to create jobs here, they won't. Like they are doing now. Building where there is a stable financial market

  17. By mike_kerns (mike kerns)
    Feb. 13, 2012
    2:48 p.m.
    Flag

    The job creators under George W Bush and his Republican Congress were given tax cuts along with reduced regulations ( think the elimination of the glass-steagle act and the uptick rule) what were the results? 1.1 million jobs created the worst job creation record in history and those jobs were wiped out by the worst recession in modern history starting in the George W Bush presidency.

  18. By wtplv (Michael Casler)
    Feb. 13, 2012
    3:09 p.m.
    Flag

    Mike_Kerns,

    You might want to check your facts more carefully before you write. The Glass Steagall Act was repealed in 1999. The Senate voted along partisan lines (R's in favor and D's voting no) but the House approved the repeal on a bipartisan basis 362 to 57 and the bill was signed into law by none other than former President William Jefferson Clinton.

    Mike, there is plenty of blame to go around for where we find ourselves today and the blame belongs to both parties, not just one.

    Michael

  19. By wtplv (Michael Casler)
    Feb. 13, 2012
    3:24 p.m.
    Flag

    Kevin,

    Why are you willing to give a pass to the R's and the D's for not re-writing the tax code when they controlled enough of government to give it a try?

    I read what you write and know you are smart enough to know this big change is one we really need. I'm non committal on capital gains. Raise the rate. Ok. Don't raise the rate? OK. It isn't what is necessary. It's a bandaid.

    This is the problem. There are no simple, easy soultions to this problem. The only ones available are big, painful and unpopular and our two parties are not going near any of these solution unless we force them to.

    Michael

  20. By mike_kerns (mike kerns)
    Feb. 13, 2012
    3:55 p.m.
    Flag

    Casler

    Indeed check your facts. The Graham, Leach, Blily bill passed by a super majority after boener stated handing checks out on the house floor. A super majority cannot be effectively vetoed by a president. Secondly this bill only repealed the first half of glass steagle. The Republican Congress of 2005 repealed the rest of glass steagle. And regardless you cannot honestly defend the pathetic job creation record of George W Bush who along with a pliable Republican Congress fulfilled every wish of the supposed job creators.

  21. By DrJCA1 (Joel Ashenbaum)
    Feb. 13, 2012
    4:08 p.m.
    Flag

    Argue and fight all you want, nothing will ever get fixed in this country. We have been going downhill for decades, no matter the politics of those in charge. Money buys our elected officials and dictates what happens in congress and the white house. American voters constantly send wealthy (mostly lawyers) individuals to Washington every election. These people team up with their lobbyist buddies to decide what is going to happen. Nothing any of us do, save for throwing every incumbant out in every election, will change that. Since most of you vote emotionally, not intelligently, that will never happen.

    I"m older and fairly affluent, so I really don't give a damn any longer. We tried to get a Realist Party going in the 60's but were either too left or too right for the masses. Some of our platform:

    A low, flat, fair tax on all income without deductions, exemptions, or loopholes.

    The outlawing of lobbying when money or gifts are involved. Lobbying is simply another name for bribery, which theoretically is illegal.

    Bring home most of our troops and equipment we have all over the world. Stop being the world's policeman. If the UN cannot do this job, we need to get out.

    Welfare for 1-2 years at the most, we will pay to train you for a job, and for one child only. No more multi-generational welfare recipients.

  22. By TEA (Mark Traeger)
    Feb. 13, 2012
    4:12 p.m.
    Flag

    Great news for thesun socialists. Obama's budget, released today, calls for $1.5 trillion in new taxes. Especially on the dasterdly rich.

    Bad news for thesun socialists. Harry Reid will not bring it to the floor for a vote.

    Great news for thesun socialists. GOP's McConnell will try to get the Obama budget to the senate floor for a vote. If he can get it by Reid.

    Bad news for thesun socialists. Obama's budget won't get ONE DEM vote.

  23. By TEA (Mark Traeger)
    Feb. 13, 2012
    4:15 p.m.
    Flag

    here,here...dr.j

  24. By wtplv (Michael Casler)
    Feb. 13, 2012
    5:04 p.m.
    Flag

    Mike,

    The House vote was bipartisan and included many D's. Did they accept Boehner's checks as well?

    I don't defend former President Bush's job creation record. It wasn't very good. I will say he was a poor stewart of the nation's finances, as is President Obama, but just as Obama, our former President did not have exactly pristine circumstances to operate in.... dot com implosion in 2000 and then 9/11.

    Mike, I just try to look at this honestly, and if that is done, this simply isn't a one sided deal.

    Michael

  25. By abostonboy (Kevin Lustig)
    Feb. 13, 2012
    7:07 p.m.
    Flag

    There you go again, Future. There is absolutely no relevance to the one number you keep hanging your hat on, "Bush December 2007 employment number 146,273,000". He was President for another 13 months after that. Use the January 2009 number: 142,187,000 (well, that's the number from the chart you get your info from). That's almost 4.1 million jobs lost in Bush's last 13 months. Four million jobs lost in Bush's last year!!

    No matter how often you say something that's not true, it's still not true.

  26. By airweare (Joe Lamy)
    Feb. 14, 2012
    7:36 a.m.
    Flag

    Casler is absolutely right on, that it is not a one-sided deal. His acumen is reflected in all the knee-jerk reactionary defense you see splattered here and wiped on the toilet paper of many previous weeks' comments.

    But the one truth that seems to slip away unnoticed belongs to the doctor.

    He has witnessed the fabric of society crumbling so slowly that most folks were shuffling along and didn't even notice how we have opened the gates to lobbyists and handed the wealthy significantly more than previous generations, and our society is sucking hind teat as a result of a plutocracy inside the beltway.

    He points out the massive degenerate population growing from ill-planned welfare programs that spawn sloth and dependence, rather than vigorous independence, self-reliance, self-worth and self-determination.

    We need good doctors and vigorous individualism, but mostly we need to take stock of who we have become, what we're missing and how to restore our connections with what works.

  27. By TEA (Mark Traeger)
    Feb. 14, 2012
    9:32 a.m.
    Flag

    Unions are dead.

    The middle age with kings describes socialism/marxism/communism exactly. All the peeons/taxpayers are governed by the elite who will retain their power at any cost. Even at the cost of killing their own people. Stallin, Mao, Khemer Rogue(sp). The elite tell the people what is best for them and what they need and don't need.

    Or you can have the freedom and liberties to work hard and fail or succeed based on your own initiative and capabilities.

    Choose.

  28. By mike_kerns (mike kerns)
    Feb. 14, 2012
    11:12 a.m.
    Flag

    There you have it, not one right wing commentator even attempted to defend the privileged tax rate enjoyed by the wealthy. They sure did try to change the subject though.

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