Spreading the Wealth

by Guest Blogger Nikkis, CPA

What do Republicans really mean when they say that Democrats want to “Spread the Wealth?” They mean that Democrats want to take wealth away from the rich and give it to the poor. What have Republicans done over the last eight years while holding lead office in our country? They have been spreading the wealth…however, one problem though, they have spread the wealth from the middle class right on up to the wealthiest of us all.

What do Democrats really want to accomplish by so-called, “Spreading the Wealth?”

Democrats believe that members of the middle class deserve a break. They don’t propose to provide this by “taking away” from the rich; rather, they propose that big corporations and very wealthy individuals pay the taxes that already are set in the tax code, without benefit of the tax credits that have been lavished on them. This is how Democrats plan to pay for the tax cuts they propose for the middle class.

One thing my college tax professor told me that I have always remembered is that 5% of the people in this country provide 95% of the tax revenue. That is right, 5%. But here’s how that works…

I am Nancy Smith, an accountant, and I make $50,000 per year. I don’t enjoy any tax credits and pay a straight 15% tax, which is $7,500.
Let us now say I am Nancy Swope and just invented an automobile that runs on a battery, not gas. I sell the patents and make a profit, in a single year, of $45,000,000. With no tax credits my rate would be 39.6%, so I pay $17,820,000 in taxes. Wow, seems like a lot huh? But Nancy Swope still has $27,180,000 after taxes, along with the satisfaction of going a long way to help save “Mother Earth.”

It would take 2,376 Nancy Smiths to pay the taxes that one Nancy Swope pays.

Now, the details are much more complex than this example, and the top 5% in our nation would pay a lot more taxes than on a mere $45 million of income, but you get the point. However:

As a CPA I have worked on corporate tax returns for over ten years, and I am amazed at how little tax is paid on the business returns I prepare. Republicans complain that we have the highest tax rate on businesses at 35%, more than in any other country, and are appalled by that. But what they don’t acknowledge is that many of these companies don’t pay a single dime of taxes. Republicans would be hard pressed to find a corporation that pays anything near 35%. This is exactly why many states have changed their tax laws and are now taxing companies on gross receipts at a lesser tax rate, rather than trying to capture all the add-backs and credits the government has given these corporations. And states can’t rely on revenues from federally taxed income anymore, because nine times out of ten, there is no federally taxed income.

This is why I, just one humble American, believe that the Democratic tax plan is financially more responsible. I don’t understand how a lot of my Republican co-workers and friends, who make about the same amount of money as I do, are tricked by this “Spreading the Wealth” claim against Democratic candidates. I mean, I know they’re smart enough to realize that THEY are “middle class.” So, when they hear that the Democrats want to “spread the wealth,” do they somehow imagine there will be a knock at the door and a federal agent will come in and take their hard earned money, and then give it to someone else?

Don’t my Republican friends realize that they themselves will reap the benefits of a more equitable tax code? The economy will grow stronger as tax credits are given to the people who need them, and when big corporations don’t have incentives to move their customer service departments to India, and when paychecks actually increase along with inflation! How can they not see that businesses thrive only when the middle class actually has money to spend on the products and services they offer?

The increase of tax revenue, at the expense of people who must then “survive” on $27 million a year versus $45 million a year, will allow us to end the war in Iraq responsibly, have better schools for our children, help prevent the next American crisis (which is health care), help pay for our elderly to live out their dying days in dignity, and yes, I know Republicans hate this…but also help the poor and ensure that we do not allow people to starve right here in our own homeland. Can someone please explain to me why this is a bad thing?

I feel it is hypocritical to support the war in Iraq because the people there are suffering, but then turn our backs on the people suffering right here in the U.S.A. Anyone who doesn’t believe there is suffering here should take a look at the statistics: America has more drug abusers, alcoholics, suicides and murders than do most other nations. We are hurting. We need help. So even though the cliché saying makes me feel yucky inside, I say, “Country First” right back to Republicans. How anyone can say it is un-American to want to rebuild our country from the middle class up is beyond belief. When the people rise the leaders rise, America rises, and once again we can become the country which every other nation admires, respects and relies on for help in time of need.

That is why I, just one American, support the economic policies of the Democratic Party.