Let’s say you got
lucky and just won $20,000,000 (the cash out amount) in the latest
lottery. Before you received a single
penny of these winnings, the federal withholding taxes on this amount would
approximate $7,000,000. Unless you had
very creative accountants and lawyers, chances are you would end up paying
close to that amount in taxes. On the
other hand, if you are Mitt Romney and earn $20,000,000 you probably had
nothing withheld but did pay estimated taxes in the amount of $3,000,000 and
probably ended up getting a refund so your total taxes on $20,000,000 was
$2,700,000. Now no one questions the
fact that $2,700,000 is a lot of money.
The issue, however should be why someone like Romney would pay
$2,700,000 when the lottery winner would pay $4,300,000 more federal taxes on
the same amount of income. By the way,
it is not just Romney that would enjoy tax advantages over lottery winners, but
anyone with “carried interest” or capital gains would end up paying far lower
taxes than the lottery winners. The
reason, in case you are unaware, is because of political clout. Lottery winners do not regularly contribute
to the campaigns of lawmakers who craft the tax laws. Lottery winners will not contribute to the campaign of Romney
thus having a voice in how their lottery winnings are taxed. The reality is that winners of Olympic Gold
Medals will probably pay a higher percentage of income tax on their winnings
and the endorsement earnings that will come from medal winnings than Romney pays
on his income tax. To make matters
worse, Romney is campaigning on his view that he should pay 20% less than he
pays presently. Why is this right? We do not need low tax/less regulation
government we need competent government.
Right now we have cheap, low cost government and it should be obvious to
everyone, particularly those still looking for jobs, that like everything else we buy, we get the government we pay for.
Cheap government favors those who can afford to buy votes over those who
cannot. Cheap government gives benefits
to those who pay the campaign costs rather than those who need the services of
government. The fact that Romney will
pay $4.3 million LESS in taxes than the lottery winner who will pay 61% more on
the same income should be sufficient proof that cheap government like anything
else that is cheap, does not work very well and never benefits the buyers.
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