By now we know the results of the Iowa caucuses and the extent to which Iowans turned out to support the lovely and talented Bernie Sanders, the not-particularly-accomplished senator from Vermont with the armload of giveaways from the tax-paying class to the not-tax-paying class. It was enough to tie him with the self-presumptive nominee, Hillary Clinton, if she is not in prison by then.
We hear so much about the man (Sanders), that it behooves us to think about generalities and specifics, and how his proposals meant to solve one problem seemingly open up three others ... each. I'm reminded when I hear Sanders speak that he has a lot in common with chemotherapy; both kill of a lot of healthy, thriving content in order to achieve their goals.
The difference, of course, is that chemotherapy can sometimes do what it is intended to.
Now, don't get me wrong; I hope that Sanders is the Democrat nominee. I hope that because he would get trounced in a general election, starting the moment that the Republican nominee asks him the logical question in a debate, to wit, once he has confiscated all the wealth of the "rich" and been able to run the government on that for the few months all that would last, well, then what? There is a finite amount of wealth in the country, and a rapacious federal government would zoom through that before you could turn your head sideways to say goodbye.
Bernie Sanders advocates income tax rates that top out at 90%. It is a fair assumption that he means for that rate to apply to people earning over a million dollars a year or so, and also that it would scale slightly down from there. You could expect that people earning, say, $200,000 a year -- not anything that will make you wealthy even at the current rate of almost 40% (plus FICA and state tax beyond that) -- would be paying a lot more as well. Perhaps 55%? Maybe 65%? You'd have to figure that would be about right.
When you ask yourself "why so much", or at least why you think that Sanders thinks that is somehow all right, the answer seems clear. He believes that the people who make a lot of money are already wealthy. In other words, he conflates income and wealth absurdly; at his tax rates no one who is not already wealthy would, you know, become wealthy. In case you wondered why people like Warren Buffett and Bill Gates are big high-rate income tax supporters, it's because they're already wealthy, and high tax rates stop the competition from gaining on them.
So ... this leads me to a question I would ask Bernie Sanders if he were sitting here in our house.
My wife and I are 64 years old and would like to retire. We owned a business together until two years ago, by which time Barack Obama's anti-business policies had helped dry up access to capital for small business. No bank was lending -- ask any small businessman about bank lending and they'll laugh you into the next county -- and without access to capital, our business closed.
It closed, I want to point out, taking our entire life's savings with it. At 62 we had nothing to retire with. No savings, essentially nothing.
That is the bad news. The good news is that I had a good profession, and was (and still am) able to earn enough to pay the mortgage and to begin all over again to save for the retirement that has been pushed five years down the road. Of course, at 64 today, I don't have a lot of time to earn much to where I could build up a retirement savings again, but I'm trying.
Want to guess what the biggest impediment to creating a nest egg from zero all over again at our age? Pretty simple, folks -- it's the current tax code, the one that confiscates about 50% of every next dollar I can earn. I want to save, I have the discipline to do so and an income that would allow me to, except that I work 100% for the government of the USA and the Commonwealth of Virginia until about the end of June. Then I start paying the mortgage, if you get my drift.
So all that sniping by Bernie Sanders about hedge-fund people that is supposed to justify his huge tax rates, well, does he even realize that what he does to penalize the 32-year-old hedge-fund yuppie on Wall Street does the same thing to a couple in our 60s trying to retire? I'm thinking perhaps not.
That's why I'd like to get the good senator in a room and carefully ask him, over and over until he gave a legitimate, thoughtful answer, this question. "Knowing what I just told you about our circumstances", I would ask him, "what part of your tax proposal would protect people like us such that we could be freed of exorbitant rates for, say, five years, and be allowed to save for our retirement on the strength of our own skills, so that we would not be even more dependent on the taxpayer in our retirement?
I'd like him to reply, and not right away. I'd like him to think about the fact that I'm not a hedge-fund manager; I'm an ordinary guy doing a legitimate job for my clients. I don't take advantage of them; I do a service (writing) that is less expensive for them than having an employee to do it. I pay more in FICA than I would if I were a W-2 employee, so that's better for the government. Because my clients are government contractors, by lowering their costs (using me) it lowers the price the government pays for the services the contractors provide.
Mr. Senator, I have a very small window, narrowing all the time, to save for a decent retirement. I would like to think that you believe, reasonably, that the Federal government should not be the biggest impediment to our ability to retire.
But it is. It is right now, and you would make it worse. Why, Senator?
Copyright 2016 by Robert Sutton
Like what you read here? There's a new post from Bob
at www.uberthoughtsUSA.com at 10am Eastern time, every weekday, giving
new meaning to "prolific essayist." Sponsorship and interview inquiries cheerfully welcomed at
bsutton@alum.mit.edu.
No comments:
Post a Comment