Jack Troy’s article “How the rich shrink their tax burden” (April 14, TribLive) references Joseph Rosenberg’s tax loopholes for the rich. The “loophole” mentioned actually helps all earners increase and retain wealth.
If people work and save, the tax code allows them to retain what they saved plus any earnings. Rosenberg calls this “buy-borrow-die.” I contend it should be called “work-save-wealth.”
Regardless of what politicians say, the income tax does not disproportionately benefit the wealthy. It favors lower earners by lowering their tax burden with lower rates, credits, deductions and programs not available to high-income earners. The tax code lowers taxes to where almost half (47%) of all earners don’t pay any income tax and reduces taxes for many middle-income earners. While the top 5% earners pay 60% of the taxes. Maybe we should not refer to any part of the tax code as “loopholes” but simply the way the income tax is structured.
Several congressmen want to tax the rich’s wealth, implying our debt will decrease and lower earners will pay less taxes. First, there are not enough “rich” to make much of a difference. Second, taxes will not go down, due to required obligations, e.g., debt service, Medicare and other government programs. We cannot tax our way out of debt.
The tax code is structured on one’s ability to pay and retain earnings. Increasing taxes on billionaires will result in fewer billionaires and more lower earners. The answer is to reduce government spending and not increase taxes. Don’t believe those who say the rich are the problem. If anyone is, it is Congress.
Tom Cerra
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