Politics, once a noble calling, has degenerated into slime ball, double speak, demagoguery usually reserved for defense lawyers. Many years ago, while I was in college, I did an internship for U.S. Senator Edmund Muskie, and later was a paid staffer for U.S. Senator Bill Hathaway. Politics was different then. Now it is disgusting.
The politicians of both major parties should listen to Mark Cuban. Mark is talking sensibly about business and tax policy. Please read his blog post (linked above) to get the full picture. Mark has done a masterful job of explaining why taxes should be higher on the super rich, and why $250K per year should not be considered rich.
Warren Buffett has been in the news a lot lately saying that he, and most wealthy people, pay a lower percentage of income in taxes than their secretaries do. That is because Buffett gets most of his income through capital gains which is taxed at only 15%, while most people get most of their income from a W-2 salary which is taxed at much higher rates. Everyone pays a social security tax, known as FICA, of 6.2%, but it caps out at $90K of income. Everything over that is free from FICA tax. Sales tax is another regressive tax ...proportionately it effects lower income people more than rich people.
Mark Cuban actually makes sense of all of this by making several proposals.
Consumption tax on luxury items - "I would be perfectly fine paying a higher percentage of income, both in federal income taxes and as part of a consumption tax on luxury items. If Warren wants to buy or build a yacht for a hundred million dollars. Nail him with a 10pct federal tax surcharge. If I want to buy a Gulfstream Jet for 40mm dollars. Nail me with a 10pct federal surcharge above and beyond current taxes."
$250K per year is not rich - "The perspective that Hillary Clinton is offering that 250k in annual earnings qualifies you as rich is not only ridiculous but its a huge disincentive to those who work their asses off every day and have accomplished a salary that rewards their hard work. It also will impact millions who can least afford it.
I will tell you who will suffer the most if a "tax increase for the wealthy" starts at only 250k. The 50 plus year old executive who has spent the last 25 to 35 years working his or her butt off to reach a 250k salary. The 60 year old executive who is already scared shitless that their job could be eliminated tomorrow and that they have not saved enough for retirement."
Cut taxes on small business - "If we really want to stimulate job creation in this country, take the same approach to small business with fewer than 25 employees that we take to Internet taxes. Outlaw them.
No taxes of any kind on small businesses with fewer than 25 employees. No employer payroll tax. No state or local taxes. No taxes on earnings. Nada. The business owners will pay income taxes on their personal income they pay themselves, but not corporate earnings."
Mark Cuban has it right. The politicians are wrong. They want to make this a class warfare issue pitting the low income people against the high income people. Mark says raise taxes on the truly super rich, not the "high income" people who work hard every day for $100K to $250K.
Mark's idea for not taxing small business (up to 25 employees) would do more for real job growth and economic growth than anything the politicians from either party could dream up.
Give the death tax the death penalty. I have never understood the logic or fairness of the estate tax, which is really a death tax. How is it fair for an entrepreneur to work really hard to build their business, pay very high taxes on their income every year, then pay even more capital gain taxes on their investment income, then pay another 55% in estate taxes on top of all that when they die? How is that fair? Many entrepreneurs have to sell their businesses because their children can't afford to pay the estate taxes. The politicians always trot out the "family farm" example, but the far more common example is the thousands of small businesses of every description that must be sold every year to pay estate taxes.
These issues are too complicated for politicians to understand, and they don't fit into pithy 20 second sound bites...so they never get addressed. Instead we are treated to pontifications on immigration, national defense, and education. And nothing changes.
Mark Cuban, please run for president!
OK, now that is off my chest...I will return to topics I love like technology and business.