Wednesday, February 22, 2012

Money working for money?

Santorum has got Mitt on this one. Watch the video…he makes Mitt look so out of touch.  The Santorums made a d**n good living: $3 million in about 4 years.  He's not poor, or middle class, or even upper middle class…he's rich.  But he pays taxes at a rate that seems to make some sense: about 28%.  This is not even close to the approximately 15% of taxes that Romney pays on $21 million.  Frankly, both of these presidential candidates's tax rates seems to buttress President Obama's point of taxing millionaires and the super wealthy at a higher rate.  

Rick Santorum WORKS for his money and most of it, by his reckoning, is earned and not dividend income from stocks. So he pays the higher 30% tax rate.  He's certainly well off, but regular people understand his kind of wealth. After he left the senate, he had similar issues that most people have had, he lost equity in his house, he has had to take care of a disabled child, kids in college; he's had to hustle (in relative terms) for his money. He says he didn't really invest his income into various stocks, EFTS, mutual funds and bond combinations to earn money for his retirement -- sure you didn't -- but I'll take him at his word.  However, if he did, his dividend income should not be taxed at the same rate, but at 15% because, as the republicans say, that money has already been taxed; it's criminal to tax it twice. "Keep the capitol gains at 15%!" the republicans say, "Matter of fact, lower it!" As a person with a small stock portfolio, I'm all for relatively low capitol gains taxes, cause I ain't got a lot of capitol gains.  Tax them heavily and like a weight on a liquid dieter, them gains would float away.

Here's where the Santorum/Romney dueling tax rates make Obama's point: Romney's money came not from his labor, but from his money's labor.    He originally made a lot of money and then invested it accordingly, and now lives off the proceeds.  "Great!" you say, "I'd like to have my money do all the work for me too. Why should he pay his taxes twice?" However, he's not paying taxes twice -- he's paying it ONCE, and once only -- at a rate HALF what everyone else is paying; on $21 MILLION -- money he makes each and every year whether he lifts a "just the right sized" finger or not!  This is how CEO's of large companies make out like fat rats.  They accept their pay from dividends, not earned income, so it is taxed only once and at a lower rate.  Minnie, the grocery store check out girl can't make that choice.  Dr. Simmons, the gastroenterologist at John's Hopkins making $250K can't make that choice either. 

The Obama administration has conceded the earlier $250,000 limit and raised it to $1million for the point at which the so called "Buffet Rule" would take effect. Remember, annual INCOME, not overall wealth,  decides the rate at which one should pay.  So say you made $999,999.99 in dividend income.  You would not be taxed at the higher rate, but those who make more, should pay more.  The idea is that, when you are making in yearly stock income under $1million, you're probably working hard for your money, even though at that level, don't get it twisted -- y'all is rich.  But those whose MONEY is singing the the famous Donna Summer song, "She works hard for the money!" to the tune of many millions, should be taxed at the same rate as those who actually wear a waitress outfit in white orthopedic shoes dancing in a real diner to make money the old fashioned way.  It's only fair.

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