The liberal media is now fully behind Obama’s plan to solve the fiscal cliff. The Huffington Post reported today, "offer to avert disaster sparks GOP outrage" and the New York Times asserted in a front page story today that the tax code is less progressive than in 1980, back when Reagan was president.
Really? Let's take a look at who pays federal income taxes in this country. According to the Tax Foundation: the top 1% pays more than 37% of all federal personal income taxes, the top 5% pays 59% of federal income taxes, and the top 10% pays 71% of income taxes on the federal level.
So if you wanted the tax code to be more progressive, maybe the top 10% should pay 90% of taxes? 95%? 100%?
I think this whole argument is hogwash. True, the tax code is not fair, not because the wealthy aren't paying enough, but because they pay too much.
Everybody needs some skin in the game. If you aren't part of the system, or if your dollars aren't at stake every time the government adds a new federal oversight panel or commissions a study on the effect of exercise on shrimp, well, you just won't care as much.
Who could blame you? It’s not your money at risk.
Also on the topic of taxes tonight, Costco cofounder and CEO, Jim Sinegal, is in the headlines because of today’s editorial in the Wall Street Journal. The executive has supported the president, and has even spoken on his behalf at the Democratic National Convention in Charlotte earlier this year.
So, it was surprising when Costco became one of the scores of public companies awarding a special dividend to avoid Mr. Obama’s dividend tax increase. Other companies are moving existing dividend payment plans into this calendar year for the same reason.
Here's the math: Costco will pay $7 per share this month or $3 billion to shareholders. Here's the rub, the company will borrow to do it. Dividends are typically taken out of earnings.
I fully support executives opting to take dividends early, but for Sinegal, who's apparently been a supporter of Obama and his idea of "shared sacrifice”, it’s disingenuous at best.
Sinegal will make $14 million, or $4 million more than he would have had he waited.
Tax fairness? Shared sacrifice? For who?
The Willis Report with Gerri Willis investigates the top business stories, outs corporate scams and polices D.C. policy.