• Posted on Monday, February 6, 2012
  • Bookmark and Share
  • email
  • |
  • print
  • |
  • rss

tool name

close
tool goes here

Commentary: Income tax inequality debate is fueled by fairness, not envy

email this story print this story jump to comments

I will spend much of this weekend taming the beast that is my income tax folder, a multi-pocketed file with such handwritten labels as Office Supplies, 1099 and Charity. I keep detailed documentation in order to take every deduction available. Like Mitt Romney, my husband and I will pay Uncle Sam what we owe him but not a penny more come April.

This is by way of saying that we can rage all we want about Romney’s tax rate, how he pays a much smaller percentage of his income than the rest of us working stiffs, but the GOP presidential hopeful has done what most Americans try to do every year: Keep as much of their money as they can.

Mortgage interest? Check.

Donations to church and alma mater? Check.

Medical expenses? Check.

Romney released two years’ worth of tax returns this week, and the resulting debate has been as exciting as a season-ending installment of Survivor. In 2010, he and wife, Ann, earned $21.7 million and paid $3 million in federal taxes — a 13.9 percent tax rate, which is much lower than that of a family scraping by on an annual salary of $50,000.

This is inequitable, unjust and unreasonable, but Romney isn’t to blame. The problem is an outdated, labyrinthine tax system that is grossly unfair, a system that makes tax filing an onerous task for those of us with various sources of income, a system that favors the rich under the guise of promoting investment.

Romney benefits from a loophole known as a carried interest provision, which gives a handful of investment executives preferential tax rates. It’s perfectly legal — although you and I probably don’t earn enough or the right kind of income to qualify for that, so we fork over a larger percentage of wages to the federal government.

We shouldn’t begrudge Romney his millions. In a way, he’s being rewarded for his skills and business acumen as a venture capitalist. Good for him. I expect similar rewards for my talents, as do my friends. Most have studied hard and now work long hours to achieve their monetary success.

But Romney has protected his millions by taking advantage of a tax system that is skewed against the middle class. He is able to multiply his millions through avenues not available to the average American, through loopholes and credits and deductions passed into law by the very people who stand to benefit from them.

Citizens for Tax Justice, a nonprofit advocacy group, has estimated that the tax plan Romney has proposed would allow him to pay less than half of his current rate. And under GOP rival Newt Gingrich’s plan, he would pay no taxes at all because Gingrich wants to eliminate taxes on capital gains, dividends and interest income.

Romney’s tax return, a veritable magnum opus at 550 pages, inflames the growing debate about income inequality in a country that prides itself on providing equal opportunity. It comes at a time when some leaders are calling for cuts in social programs that would disproportionately affect those with less income but higher tax rates. No wonder Occupy Wall Street has struck a chord with those who find their prospects diminishing and their income stagnating.

Envy is a dangerous emotion, yes. It colors aspirations and damages success. Some leaders, invariably those who stand to gain most politically or monetarily, like to paint the discussion in those terms.

But it’s not envy or jealousy that fuels the anger over secretaries paying a higher tax rate than the millionaires they work for. It’s a sense of fairness, a yearning for a level playing field where everyone is being treated equally.

  • Bookmark and Share
  • email
  • |
  • print
  • |
  • rss

tool name

close
tool goes here
JOIN THE DISCUSSION

We welcome comments. To post one, you must sign in using either your McClatchyDC login or your login for Facebook, Twitter or Disqus. Just click the appropriate box below.

Please keep your comment civil, short and to the point. Obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. If you find a comment abusive or inappropriate, please flag it for the moderator by placing your cursor on the comment, then clicking the "flag" link that appears. Thanks for your participation.

Stay Connected

Sign up for email newsletters RSS
Follow us on your iPhone Follow us on your Android device
Follow us on Facebook Follow us on Twitter Follow us using Google Currents

FEATURED COLUMNIST

leonard pitts jr.

Miami Herald columnist Leonard Pitts Jr. won the Pulitzer Prize for commentary in 2004. He is the author of the Novel, Before I Forget. Read his latest commentary here.

COMMENTARY AROUND MCCLATCHY

FEATURED COLUMNIST

joe galloway

McClatchy's veteran war correspondent, Joseph L. Galloway, retired in January 2010 after half a century in the newspaper business. Read his farewell column, and an archive of his take-no-prisoners commentary. Here's one of his most-requested columns, "Fridays at the Pentagon."