Letter to the Editor "Wealthy People" full text

Let me first say what my definition of a wealthy individual is which may clear up some things for people. The cut off is really rather arbitrary, but should begin with at least 1 million dollars of income per year, whether salaried or passive. There are certain exemptions that should be taken into consideration which would be spelled out in the tax code, some of these provisions are called deductions and credits. These deductions and credits would be for things that we would want as a society, like jobs and real investment, and not for those things that we don’t find useful or as useful as the protected income. Some people have concluded from my earlier letter that I was talking about people far below the one million dollar cut off, but have incomes higher than 80% to 90% of us in this country. The one million dollar cut off will have to be adjusted upward in the future though, because of inflation, and where the line should really be is up to debate depending on what people believe is fair. Right now the cut off for the IRS is 35% for $326,000 in AGI for the highest bracket for 2005, and the real rate declines as your income rises above that because of and credits and a flat base amount. The higher your income, the lower the real rate is. The question that I’m asking is: should people making more than that cut off amount be getting their taxes lowered with the tax breaks, while making the people in the lower brackets take on more of the burden of financing the government? An alternate question might be what the republicans seem to be saying, which is why not just borrow the difference while lowering the tax rate for everyone?
Bill Orton’s letter implies that he thinks I’m a liberal and therefore don’t understand economics or capital and it couldn’t be further from the truth, I have a finance degree from the bloated institution of higher learning on the hill overlooking Fayetteville and I’m a moderate conservative and an independent. I didn’t think I had to explain elementary economics as a forward to my letter to give me credibility, but I guess I was wrong, though the length of the letters don’t allow long explanations. I know that capital is better left in the hands of the people, but our country isn’t quite a totally capitalistic economy and we have to pay for those things we want to make it a place we can all live and not just a savage place where only the strong survive and weak are eaten. I also know that leaving the income in the hands of the people will spark investment and create jobs and all that goes with that. I also know that there is a limit to this principal and wealth beyond a certain level will make any marginal increases to after tax income become of lesser use to the recipient once he is above the cut off level. For example, I don’t think Bill Gates is using much of his own money to start any more company’s, and more of it will not help much help him much. Of course Bill Gates is a ridiculous example since he is wealthier than everyone in Fayetteville combined. I’m saying that these marginal or incremental amounts could be better used by paying for the governments costs than given back to people that really don’t have any use for it since they are consuming all that they can already.
As far as Teri Holland is concerned, her letter also took exception to my first one, I applaud her for taking advantage of her entrepreneurial abilities, particularly in that she had so many obstacles to overcome. She is another person though, that I didn’t make it clear to, that I was talking about people much wealthier than she serves mostly. She didn’t seem to see that a downturn in the economy is different than not receiving a windfall from lower taxes, and she didn’t see that people of great means are not altering their spending of discretionary income on luxuries just because they haven’t received a windfall.
I hope that I have made clear what the definition of wealthy is so that we may get past the targets of obfuscation and move on with how we are going to finance the kind of government that we seem to want. Any spending, whether by government, the middle class, or the poor, is going to help the economy, even if it is silly spending, because someone is always making money from it. Speculating helps the economy to a point but it has its limitations. Finally, taxes are just transferring wealth from one owner to another and as Orton implies, and I agree, that spending it on things outside of America makes the United States poorer.