The New Republican Tax Code:
REWARDS PEOPLE WHO MAKE MONEY OFF INVESTMENTS OVER THOSE WHO ACTUALLY WORK FOR A LIVING
Say that two people – we’ll call them Doug and Carrie Heffernan – both worked full time last year, putting in 40 hours a week every single week. Together they made $77,000 in combined income. Based on the New Republican Tax Code, the Heffernans would pay around $6,000 in federal income taxes.
Now say, two other people – we’ll call them Jared and Ivanka – sat around all year sipping strawberry daiquiris on a beach somewhere. One day, in between reapplying sunscreen, Jared clicked a button on their eTrade account and sold some stock they’ve owned for a while. Let’s say they made $77,000 on the sale of that stock – exactly the same amount as Doug and Carrie. Based on the new Republican tax code, Jared and Ivanka would pay ZERO dollars in taxes.
So two couples make the exact same amount of money, one couple by working all year, the other couple by sitting on the beach sipping drinks and letting their stocks increase in value. The working people end up $6,000 poorer than the strawberry daiquiri people.
It gets worse from there. Say the next year Jared and Ivanka sold some more stocks and made $700,000. Jared and Ivanka would again pay no taxes on the first $77,000, would pay just 15% on the next $402,000, and then just 20% on the rest, for a total tax bill of about $100,000.
Now let’s say Doug and Carrie got fancy new jobs. They still worked 40 hours a week all year along, but this year they made $700,000 – the exact same amount Jared and Ivanka made sitting on the beach. At the end of the year, Doug and Carrie would owe almost $190,000 in federal income taxes.
So again, two couples make exactly the same amount of money – but one of them works full time and the other sits around on a beach not working.
The new Republican tax code leaves the daiquiri drinkers $90,000 richer at the end of the year than people who actually work for a living. Now play this out over a lifetime.
The people who make money off of investments ALWAYS end up ahead of the people who make their money by working.
Now do you see how an economy gets rigged through the tax code? You’re never going to be able to catch up.