To the Editor:
Heard a comment on a conservative talk show that we shouldn’t pick on the wealthy 1 percent because they pay the majority of the taxes. There was agreement by the other people who called in.
Are they serious? Let’s see if this has any truth to it.
Two taxpayers, one makes $400,000 a year and is in the 1 percent, the other taxpayer creeps into middle class at $40,000 a year. Pull out the paycheck stubs. Mr. 1% sees his FICA capped at $118,000 so he pays about 2 percent of his check to that tax, but Mr. Middle Class sees 100 percent of his income taxed for FICA. State taxes are still the same in Illinois at 5 percent. Pull out the utility bills for gas, electric, cable and water and those excise taxes look similar. Drive to the gas station and again similar amount paid in road taxes. Pull out the property tax bill. Looks similar, but Mr. 1% probably hired a lawyer to get his property taxes reduced. Head over to the mall and sales taxes look identical. But taxes for Mr. Middle Class consume a much larger share of his paycheck. Mr. 1% will probably hire a CPA firm to dig out every deduction and will cut the federal tax by quite a bit while Mr. Middle Class will have to be grateful he gets an inflation-adjusted change in his standard deduction.
One tax avoidance that Mr. Middle Class gets is to shelter taxable income in an IRA for his old age. Guess what is on the table to get cut so Mr. 1% pays less tax? The IRA. But you can stuff more retirement money into a Roth IRA that gives no immediate tax relief. Usually reserved for wealthy who can afford it. So next time you hear the rich pay all the taxes, just smile and juggle the few coins left in your pocket.