Editor, Daily Nexus:
This letter is in response to Ivan Perez’s letter (Reader’s Voice, “The Rich Can Afford to Bear the Brunt of Taxes,” April 30, 2001). Whether or not one agrees with President Bush’s tax plan, Mr. Perez’s “fuzzy math” and ignorance of the tax code needs to be corrected.
Perez gives an example of two families – one making $15,000 and another making $250,000 – and then claims that the latter will reap some kind of windfall under the new tax code and the poorer family will not get a sizeable tax decrease. However, a 4.3 person family earning only $15,000 a year pays no taxes, either under the old tax code or the new one. Furthermore, they are eligible for numerous tax credits at both the state and federal level. Additionally, if they were to earn more and make it into the lowest tax bracket, they would see their tax rate reduced from 15 percent to 10 percent under the Bush plan. They would further benefit from a $500 per child increase in the dependent benefit and the elimination of the marriage tax penalty.
The family making $250,000 does not pay 25 percent income tax, but rather 39.3 percent income tax, as they are in the highest bracket. Their burden would be reduced to 33 percent under the Bush plan. Yet this is only a portion of their tax burden. They would pay a bundle in registration tax for their “three automobiles,” property taxes on their home and high sales taxes, depending on their state of residence. Should they make a profit – there’s that evil word – by investing in the companies that create jobs for the less fortunate families, they will pay high capital gains tax.
My favorite part of Mr. Perez’s letter was his use of the PictSweet mushroom workers. Perhaps these workers would have more money in their pockets if they didn’t have to have their union dues deducted from their paychecks every week. After all, they don’t seem to be getting much for their money, as the United Farm Workers (UFW) has done nothing but lose jobs for the minority of the laborers who chose to strike.
The implied injustice in Mr. Perez’s letter does not stem from the tax plan, but from the realities of a capitalistic market. Yes, one family makes $250,000, while another makes $15,000. The only tax plan that can correct this alleged injustice is a redistributive socialist form. I’m sorry, Mr. Perez, but this is America and we pay people what the market says they are worth. If you have problems with our economic structure, may I suggest Sweden – I hear it’s lovely this time of year.