“Defend The Rich: Attack The Poor!” That’s America?


middleclassadvantage
ENTITLEMENT PROGRAMS: (noun), 1) A government program guaranteeing certain benefits to a segment of the population; 2) The right to benefits offered by a government.

QUESTION:  Why does the Republican leadership denounce raising taxes on the wealthy unless the Democratic leadership reduces its spending on ENTITLEMENT programs like Social Security, Medicare, and Medicaid?

In this post I will argue that Republican bias against the middle-class and their enrollment in Entitlement Programs is peanuts when compared to the wealthy’s routine use of their own Entitlement Programs.  Let’s get started:

Can you name the congressman or senator that represents the millions of disenfranchised Americans whose voice is never heard in Washington?

When will the top 1% step from behind Republican stonewalling and admit their greed is immoral and burdens the other 99% who can ill afford additional taxation?

Is Social Security Disability Income really an entitlement when over 70% of initial applications are denied; the application and subsequent supporting medical records takes an applicant months to collect; the process is so convoluted that it’s sired a cottage industry of attorneys that charge 30% or more of the applicants back-pay (back-pay is the aggregate monthly benefit beginning on the date of disability to the present day, minus the 6 month waiting period; e.g. number of months of disability benefits = 24, multiplied by the monthly benefit of $1,500 = $36,000 tax-free); so an attorney representing a client who’s approved for benefits would earn $12,000.  What kind of entitlement takes two years to process and costs the disabled 1/3 of their rightful benefit?  Why not streamline the application process and return the 30% to the SSA as a one-time contribution “To Bolster Solvency.”

ENTITLEMENT PROGRAMS FOR THE WEALTHY (AND APPROVED BY THE IRS)

The wealthiest Americans most likely have a financial firm like Atlanta Trust that manages a total of $17.6 billion for 2,200 families to develop a customized “capital-preservation” strategy.  In other words Atlanta Trust’s responsibility is to grow wealth or limit lost wealth by appropriating investments to historically safer instruments.  Wealthy American‘s treat their money like a business and receive categorized spending reports to keep their eye on what’s coming in and what’s going out.  Further, many wealthy American’s hire accounting firms or tax attorneys to prepare their income taxes by ferreting out every possible deduction (from more than 200 Federally approved deductions) and to advise of off-shore wealth and its tax liabilities (if any).  A team of financial professionals, tax attorneys, and their own consistent oversight reinforces the adage: The Rich Get Richer and The Poor Get Poorer.

Let’s look at Mitt Romney‘s tax situation in 2011 (as a readily available tax return and as an example of Entitlements reserved for the wealthiest American’s).

1) NET WORTH: $300 million +/-;
2) Money invested in American companies who’ve established their headquarters off-shore to avoid standard taxation;
3) Wealthy enough to hire firms to manage his assets and to uncover as many deductions as possible, which will in turn reduce his gross income tax liability to an adjusted gross income tax liability.  Remember, income tax is based on your annual income and not your net worth.

Mr. Romney didn’t disclose his gross income for 2011.  However, this is what he did disclose:

  1. His 2011 tax return was 379 pages long (a ream of paper is 500 pages);cash
  2. $13,696,951.00 (His adjusted gross income (taxable income minus allowable deductions)
  3. $1,950,000.00 (tax liability)
  4. 13.9% (final tax bracket)

If we look at the graph below, we’ll see that a person in the 13.9% tax bracket earns approximately $25,000 annually.  How on earth can someone whose gross income likely exceeded $20 million annually wind up in the same tax bracket as someone earning $25,000? (Put away your calculators, I’ve already done the math: $25,000 is 0.18252% of Romney’s adjusted gross income).

Tax Year:  2012
Filing Status:   Single
If your taxable income is between… your tax bracket is:
 $0  and  $8,750  10%
$8,700  and  $35,350  15%
 $35,350  and  $85,650  25%
 $85,650  and  $178,650  28%
 $178,650  and  $388,350  33%
 $388,350  and  ABOVE  35%

Yet, they’re in the same tax bracket?  Wondering how Mr. Romney achieves it?

  1. Great Tax Attorney’s;
  2. Preferential taxation (15% tax rate) return on investments in company’s headquartered off-shore as capital gains rather than income (35% tax rate);
  3. Crazy loophole called carried interest allowing financial managers like those working at Bain Capital (equity, hedge funds, venture capitalists) to declare their fees as capital gains (15%) rather than income (35%);
  4. Savvy and sickening at the same time.

So, back to my initial question:  Why does the Republican leadership denounce raising taxes on the wealthy unless the Democratic leadership reduces its spending on ENTITLEMENT programs like Social Security, Medicare, and Medicaid?

fiscalcliff

It would appear that this vitriolic soap-box-posturing about middle-class abuse of Entitlement Programs (which every employee contributes by way of a federal mandate requiring employers to withhold a specific percentage from every paycheck) which allegedly will be insolvent within a decade, should also include the Wealthy American’s Entitlement Programs which are routinely used in order to reduce their adjusted gross income and subsequently lower their tax liability by millions, if not billions of dollars every year.  The Federal Government loses an enormous amount of money which might be used to rescue Social Security, Medicare, and Medicaid from collapse.  But that would require closing loopholes, limiting deductions, taxing ALL income at their current tax bracket (35%); in other words forcing the wealthiest 1% to pay an income tax based on income, rather than a greatly reduced income tax based on adjusting their income by as many as 200 deductions and loop holes.  Or, simply be an American and pay your fair share.

Our current situation It’s disgraceful, embarrassing for all American’s on the world stage, and further separates the bourgeoise from the proletariat (which, historically speaking, has never been a sustainable advantage for the ruling party).  The direction we’re headed, best illustrated by the stalemate in Washington, historically ends when a few have most of the wealth and the most have the fewest.  It’s not a divide, it’s a gorge, or maybe a cliff which stubbornness or back-room politics causes a financial implosion which could have been avoided if the good of the American people was paramount, not some school yard tough-guy bullying and double-dares.

I’m embarrassed to admit I’m an American.

4 thoughts on ““Defend The Rich: Attack The Poor!” That’s America?

  1. Just hopped over here from Pinky’s blog. My first comment is that I’m used to seeing the comment option at the end of the blog, not the beginning. I wonder if that might make others think that you haven’t opened the post for comments?

    Now to the meat. I’m Australian, not American, but I remember reading somewhere that the greater the gap between the very rich and the very poor, the more trouble a country is in. Historical examples that may or may not be relevant are pre-revolution Czarist Russia and France [before the Terror]. I doubt that the US will ever sink to quite those depths, but that is where countries end up when the balance is too far out of whack.

    Sadly it seems that the average American’s aspirations to become as rich as the richest in the country is one reason why this divide is turning into an abyss. They won’t countenance any anti-capitalist changes because that might mean their own chances of becoming filthy rich will be impacted. 😦

    I wish I’d read your post before I started talking about our human ability to live with paradox, this would have been a great example.

    Like

    1. Thank you so much for your advice on layout. I had no idea (as I’m a relative newbie!) I’m pleased you picked up on the idea of a great financial divide and that the rich can’t maintain the rabble. But American politics is for sale. But why on earth would someone that earns $20 million annually want to be President? I think it’s so he can give his paltry $300,00 annual paycheck to charity! Thanks gain for your read and comments.

      Like

      1. I suspect the only people who would /want/ to become politicians are either egotists, or the odd, very rare visionary [who also happens to have a healthy dose of ego].

        Keep writing TM. It takes a while for the search engines to find a new blog and then it takes an even longer while for like minded people to find /your/ blog. I’ve been at this now for almost exactly a year and progress has been steady, but slow.

        In time you’ll end up with a core of regulars who are ‘kindred spirits’. 🙂

        Like

  2. It is in reality a nice and useful piece of info. I am glad that you simply shared this useful info with us. Please keep us up to date like this. Thank you for sharing.|

    Like

Comments are closed.