American Horror Story

Paul Ryan is scary. And not just because of those icy blue eyes and dark hair that could easily cast him in Sam Neill’s role as the adult version of Damien Thorn should a remake of Omen III: The Final Conflict ever come about. He’s scary because he’s got a plan to remake America into an Ayn Rand-ian fantasyland where only the rich survive. I could spend a long time ranting about his precarious plans for Medicare and Medicaid or his parochial views on abortion and gay rights, but, instead, I’m going to focus on taxes because this is an area in which I am totally confused about the contradiction between philosophy and practice.

Granted, I am no CPA, nor am I an economist, but the capital gains tax seems to me to be the area of most contradiction. Mr. Ryan proposes to eliminate entirely the tax on capital gains and dividends, which basically means that a person who sells and makes money off stocks will not be taxed on that return. Please note that I did not say that this individual earned this profit from actually working. The individual – or, more likely, his/her financial advisor – made a good sale, reaped the benefits of said sale, and walked away with 100% of the profit free and clear. I can’t even do that if I win big at a casino. And, isn’t it the same thing, really? Betting, gambling, knowing when to hold ‘em and fold ‘em – again, note, not actually working. I was under the impression that we were all about working hard for your money in this country. Whatever happened to all that “pick yourself up by your bootstraps” and “idle hands are the devil’s playthings” stuff? Shouldn’t we be rewarding people who are earning an income, not by sitting in their armchairs waiting for the big payoff, but by actually contributing to the day-to-day operations of the country? You know, those people who make stuff, teach stuff, save stuff, serve stuff, clean stuff, pick stuff, drive stuff, unload stuff, and fix stuff? If we are so hell-bent on getting people into the workforce, then why would we tax earned income more than capital gains and dividends, which do nothing for nation but only benefit the individual? Eliminating the capital gains tax incentivizes not working, which sounds to me an awful lot like what the Republicans would call, dare I say it, WELFARE.

I know the critics will say that a person like Mitt Romney made his money by working (though he’s not anymore), and, therefore, any money he makes off his portfolio essentially amounts to him making money off his own money. This is true. But, I’m not sure exactly how that equates to him not having to pay taxes on it. Even if you’re making money off your own money, that’s still income. My income comes from my job; Romney’s income comes from himself. In either case, we’re both earning incoming. Why is one form of income given preference over the other? And, why, nonsensically, is the person (me) who has to get up and go to work every day the one who will pay a minimum of 25% in taxes, while, under the Ryan plan, the person who can take a swan dive into his pile of money a la Scrooge McDuck pays nothing? This isn’t about hating on the rich. This about making sense and being consistent with a philosophy.

Mitt Romney aside, imagine this scenario: you’re Paris Hilton (don’t throw up). You’re born into a very wealthy family. When your dad dies, you will inherit his entire Hilton fortune. Under the Ryan plan, which not only eliminates capital gains taxes but eliminates the estate tax (or, as the Republicans call it, the “Death Tax”) as well, you will pay no taxes on that inheritance. You will walk away with millions of dollars – that you didn’t earn. Then, you (or someone you pay handsomely) will invest that money in stocks and other things I don’t understand. You will sell those stocks, and you will make money off that money. You will not be taxed (again) on that money because that money is considered capital gains. In The Communist Manifesto, Karl Marx advocated abolishing inheritance outright basically for the reason outlined above – the rich will stay rich and will have to do little to no work to remain rich because all their money will just keep trickling down through the generations. (Maybe this is what the Republicans mean by trickle-down economics. And, all this time, I thought they were talking about job creation. Hmm…)

In any case, there is no need to abolish inheritance, but there’s no reason not to tax it either. When someone dies and leaves money or property to someone else, that’s income for the receiver and should be taxed accordingly. Just like eliminating the capital gains tax, eliminating the estate tax is simply more welfare for rich folks. The Republicans shame America for being a land of entitlements, but, as far as I can see, the most egregious and most lucrative entitlements go to the wealthiest Americans.

When people living under the poverty line claim that they are entitled to a welfare check, food stamps, or free health care, what they mean is that they’re entitled to life, which, as I recall, is something we tied to freedom in the form of the Declaration of Independence. When rich people don’t way to pay taxes, what they mean is that they’re entitled to make and hoard as much money as they want. Essentially, one person wants to live lavishly, while the other just wants to live – period.

Obama has not done much in the way of bridging the gap between the rich and the poor or punishing the criminals responsible for the housing and economic collapses, but, at the very least, he’s not purposely trying to worsen the situation. And, given more time and a bigger set of balls, he may be able to start righting the ship. But, nothing Obama or Congress or anyone does is going to change national ideology. If we continue to think contradictorily about our policies and who we are as a nation – that we hate handouts, unless they’re for rich people or corporations; that we don’t need help from the government, until we lose our jobs and our kids need to go on CHIP; that we need to cut spending and tighten our belts, except on political campaigns and weapons of mass destruction; that we need to improve in math and science, but only if we can do that by laying off teachers and defunding important scientific research; that we hate immigrants, save those who are picking our vegetables and mowing our lawns; that we oppose religious extremism, but continue to let conservative Christian dogma dictate the laws surrounding what we can and can’t do to our bodies – we will continue vote contradictorily. We will continue to vote against the nation just to preserve our own self-interests. We will continue to cut off our noses to spite our faces. And then what will we be? A nation of nose-less people living in a world where the only survivors are those who can smell bullshit.

About moniacal @ X Rated

On a lifelong journey to be a person in a place...
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6 Responses to American Horror Story

  1. I now have an image of a crowd of people with no noses, and one with a nose wrinkled as if smelling something foul. :-D. Great post, Monica. I agree with most of what you said. Not sure about the estate tax part, as it seems to me all of those things have already been taxed once and I’m not a big fan of double-taxing something. Now once you’ve inherited it, and you start making money from the inheritance? Then I think that should be taxed. But not the merely getting it part, as the previous owner already paid. But, like you, I’m not a CPA, tax person or in any way good with numbers so what do I know lol.

  2. Mel, I hear you on the double taxation, but, if you think about it, the receiver is not the one who paid the initial taxes. Therefore, upon inheritance, that person has now come into what can be considered new income, which, at that point, has not been taxed (for that person, the receiver). Here’s a somewhat connected scenario: I have recently started going back to school, and my job gives me tuition reimbursement. I have to pay the tuition, fees, and book costs (including book taxes) up front, and then I am reimbursed after I complete the course. When my school reimburses me, however, they tax me because tuition reimbursement counts as earned income. So, I never fully get back what I put in to begin with. This is a similar situation in that I am paying fees and taxes once and then paying them again on the flip side. This is actually worse than the Death Tax because I am the one paying on both ends, whereas with inheritance tax, someone else paid on the front end but the receiver pays on the back end. In terms of my reimbursement, do I love this idea of being taxed twice? Not particularly, but do I accept that getting to go to grad school virtually free is, indeed, income in some way? I do. Will the fact that I’m getting taxed de-incentivize me from continuing my education? No, it will not. I’ll pay that burden because I understand in the long run that getting more education will benefit me, and potentially others, in the future. And, even with the tax, I’m still getting a pretty good deal on my schooling. I think that it’s important to understand not just the “what’s in it for me” idea but, really, what’s fair and logical.

  3. Tess says:

    So right on. The income gap keeps growing, we are definitely more and more becoming a nations of haves and have-nots, and I don’t see an end in sight.

  4. Vince says:

    Hi Monica,
    the theory behind having a lower capital gains tax rate is the majority of people selling investment are retired people who use the income to pay for their expenses.

  5. RP says:

    Frankly, success is not rewarded in our system whether you’re at the hard working just-getting-by stage or at the six or seven figure level. The solution to all this, as in any agreeable deal, is to adjust this f’d up system to provide relief for all involved, regardless of income level. I think people get fired up about this because of potential unfairness…. not because tax cuts are a bad idea.

  6. Ben D'Antonio says:

    Paul Ryan is a hypocrit. He voted for TARP, He voted for the Auto bailout. He voted for the Bush tax cuts that has cost this country $1.2 trillion dollars over the last 8 years. He voted for the Bush prescription drug plan; another $700 billion dollars not paid for. He benefited from the Social Security Trust Plan after his father died. Don’t get me started about the money spent on two wars.

    Now after being part of a party that spent money at historic rates Mr Ryan wants to get that money back from the people who need it most.

    I’m ashamed he’s a catholic.

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