9/13/2012 11:09 AM
Andy,
The math ought to be real easy. Lets say someone makes $3 million dollars, at 39% tax rate, they would pay $1,170,000 dollars, at 20% which is the one number being bantered about the tax would be $600,000. And if they go to 0% on capital gains, they get to keep all 3 million dollars, that is if that is how they earned it, and those probably doing the most donating that is how they probably get most of their money. For a $100,000 investment to a campaign and hoping to get influence to the policy of their preference, that is a pretty good investment especially if they get the return they hope for. Of course 3 million for most of those making donations are small potatoes but I think I have shown you the math you requested.
Of course that's just simple math before any deductions are taken, money reinvested in tax deferred accounts and other advantages that are there to be used.
That also doesn't factor in Jon's example, by these taxes do we discourage the wealthy to spend money knowing they will have to pay capital gains tax when they sell, or estate taxes their children have to pay when they inherit? According to David's comments, if I interpret them correctly, no it doesn't seem so.
As to your second statement about being fair to the kids, you are correct about it's not fair to the kids that the country debt has gone up like it has, maybe if President Bush would have paid for the wars he was started or paid for the donut hole in Medicare part D instead of cutting taxes, if President Obama would have let all the Bush/now Obama tax cuts expire maybe that would have helped the debt, but of course this could have caused numerous other problems. So how do we get out of debt now? The economy has to get moving, since private sector does not want to spend the trillions it sits on, who else is going to do it? The government is basically left to try and stimulate the economy, or raise some taxes or both. If you want to get rid of the debt, revenues have to be raised and spending has to be cut, let's debate all of that, how we do it, I'm sure solutions could be had if the politics were kept out of it.
Mel
Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO