De Vos: Need to find a new garden (column)
Entitlements are a bad thing, right? When folks talk about entitlements, they’re usually complaining about other folks who are getting energy assistance and driving a new four-wheeler. Or some swarthy neighbor on Medicaid who looks perfectly healthy. The crux is that people understandably object to paying for something that somebody else gets. It’s like your taxes are buying Happy Meals for the car behind you.
It boggles me that some folks demonize tiny entitlements while ignoring the monstrous ones eating their lunch. Mostly-ignored is the Long-Term Capital Gains tax, which is nothing but an entitlement for the rich. About 70 percent of the benefit goes to Americans who make over $1 million annually. The rest of us pay 40 billion per year to plug the leak from this loophole.
It works like this: if you earn $1000 as a Wal-Mart greeter, you pay $350 of it to the IRS. If you earn that same $1000 selling Chipotle stock at 400, you only pay $150 to the IRS. The disparity illustrates how rich people’s money is worth more than the poor’s. The $350 is so high because the $150 is so low.
A larger unsung entitlement is the “step-up-in-basis rule” which allows rich people to pass on assets and estates to heirs without tax on the appreciation. This allows them to avoid even the reduced obligation of capital gains, adding another 62 billion dollars to middle-class taxes every year.
Just closing these two patently unfair loopholes would reduce taxes on the middle-class by 100 billion dollars every year. In total, tax loopholes shift the tax burden onto our shoulders to the tune of one trillion dollars annually. If our politicians really wanted a balanced budget . . . but they don’t. Instead, our Congressmen ferociously guard their rich patrons, scratching at their feet like chickens after the pieces of silver that spill from their pinstriped pockets.
How’d we get here? We need look no further afield than our own Senator Cory Gardner for a world-class example. He’s so deeply devoted to maintaining tax privileges for the wealthy that in 2009, even before he was a senator, he signed the Taxpayer Protection Pledge, in part vowing to “. . . oppose any net reduction or elimination of (tax) deductions.” There was our nascent senator, already bowing to the one-percenters.
More recently, as reported in the Feb. 1 Lamar Ledger, Cory Gardner proudly co-sponsored the Death Tax Repeal Act. Cory was quoted, “Growing up on the Eastern Plains and working at my parent’s farm implement dealership allowed me to see the devastating impact the death tax has on Colorado families . . . many families build their farms and small businesses with the hope of passing on their business, success, and opportunities to the next generation . . . and that’s why I’ve long supported the repeal of this onerous and unfair tax.”
A rebuttal in the Feb. 19 Pueblo Chieftain said Gardner was blatantly attempting to “win favor with billionaire elites,” pointing out that the “devastating” family tax exempted the first $5.49 million dollars or $10.98 million for a married couple. Across the entire length and breadth of the United States, including Alaska and Hawaii, there are only 20 family farms that might be impacted, possibly only one in Colorado.
So why is Gardner pushing this? The Tax Policy Center tells us that only 5,000 of the wealthiest Americans will ever face this tax. Cory’s bill means that the rest of us, the 324,995,000 poorest Americans will pay an additional $16.9 billion dollars this year to buy Happy Meals for the 5000 richest people in America.
So much for the devastating impact on Colorado families — and so much for Cory Gardner’s true motives.
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