What Both Parties Get Wrong About Capital Gains & Taxes

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Screen Shot 2014-09-26 at 3.02.58 AMPeople should be allowed to build wealth. Families should be allowed to accumulate wealth and hand it down from one generation to another.  They should not be taxed into oblivion.  On Monday there was a flurry of news that quite soon, well over half the wealth in the world will be controlled by one percent of the population.  Politicians pay lip-service to ‘helping’ the middle class, but I swear, all they are doing is destroying everyone in order for the ultra wealthy to grow even wealthier.

In order to help the Middle Class (or what’s left of it) President Obama is planning to raise capital gains taxes on couples making over $500,000 from 23% to 28%.  It looks good.  It makes him look like he’s protecting we the little people while it gives the GOP something so scream about. It’s good for everyone but we the little people, who, once again, are getting screwed.  $500,000 or over, on a one-time sale of property or stock is not much money, not in the long run.  I’m not talking about millions, I’m talking about anything from $500,000 to about $2 million.

I never thought much about it until recently. I had no need.  Now that I’m in charge of the probate, wills, what’s left of my father’s estate, and making sure we have enough money to care for my mother, I’ve suddenly been hit with reality. Taxing we the little people, on something that we the little people (or our parents) worked their life-time to save, to have something to live on, and a little something to leave the children and grandchildren is stealing from we the little people.  It’s not like we the little people went out and lied and cheated, swindled our way to billions.  This was hard-earned money, set aside, for survival.

We’re selling a piece of property. It may look like good, but it’s going for an obscene $500/acre.  That’s far too low.  But, because of the capital gains reset when my father died.  The value of the property is now established at $500/acre.  My realtor friend in Texas said we should be listing it for twice that, but what’s done is done.   If I raise the price, now, my mother gets screwed, big time, and that is wrong.

My sister and I need that money to care for her.  We need full time care – not nursing, but just someone being with her.  That’s going to run close to $240/day @ $10/hr/24 hours.  That’s $1690/week X 52/weeks = $87,360.  That doesn’t include someone to work on the yard.  It doesn’t include renovating her entire home to be wheelchair & handicap accessible, adding a new bath with a walk-in shower.   What we will get for the land sale, if we can get $500 bucks/acre will go out to pay income taxes – a heck of a lot of it.  My calculations, by the time everything is paid out, back in taxes, there will be about $700,000 left.  My mother’s family excels in longevity.  If we are careful, she had a good 8 or 10 years.  In other words, she will run out of money, thanks to taxing the ‘rich’.

There’s nothing rich about it.  I have absolutely no problem with capital gains on anyone with an income over maybe $2 million – which isn’t all that much.  What is lost in translation is the one time sale of this sort of thing puts a person’s income up in that top earner level – one time – and they’re screwed.

Center for Public Integrity
Center for Public Integrity

Why not tax all that cash corporations are hording in banks, off-shore, and maybe close the loopholes so that companies like GE, Apple, Microsoft, Google, and so forth and so on are paying the same tax percentage we the little people are paying.  That would be tax fairness.

Instead – this is a joke.

The Hill
The Hill

I’m afraid it just proves that the Obama Administration is clueless about how small business works, and how much money it takes for the average family to survive.   The GOP  basically knows how small business works, but doesn’t give a damn.  They are protecting big business.  Until both groups realize that requiring mega corporations to pay the same percentage as small business, and make them pay, we’re all screwed.  It is obvious both the Democrats and Republicans are not interested in real tax equity.

We the little people, once again, will be screwed on our way to the gutter.  Obama’s proposals look good on paper, but for the upper middle class, they are ruinous. Too bad he isn’t paying attention to Chris Van Hollen.  If someone doesn’t decide to do something bold and honorable, we the little people are the real losers.  We’ve seen our quality of life degrade, drastically during the past decade.  There are things which truly need to be addressed, such as climate change, and health care, but the way it has been done has hurt everyone.  What we truly need is logic and reason in DC.  Forget it.

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