Hood column panders to wealthiest Americans


Richard Good

Sunday, December 3, 2017

I have read columns by John Hood where he tries to make the case that individual taxes are fair, but we need more corporate tax breaks to boost the economy. On the surface, his arguments seem reasonable till you start actually looking at the tax code.

Consider the fact that most low income households cannot afford to purchase a home, but can only afford to rent. Elizabeth City is a prime example of this phenomenon. Because they do not own the home they live in, they do not benefit from the tax deduction of the mortgage interest. They are deprived of one of the main builders of wealth for middle and upper income taxpayers, equity in their homes. The landlord on the other hand not only earns rental income, he also gets to take a big tax deduction in the form of depreciation on his rental properties. Landlords generally have no interest in making rentals more energy efficient, thus saddling renters in many cases with crippling utility bills.

Savvy middle and upper income taxpayers make contributions to their IRA’s, 401k’s, 403b’s, etc., further reducing their tax burden during their high income earning years and deferring tax on their investment income till they retire. In some states, investments in college savings accounts are tax deductible on state tax returns, a tax loophole availing the wealthy an educational advantage for the next generation. The wealthy will be able to pass on even more of their wealth if the Estate tax is eliminated or the limit raised as proposed. 

I remember going to the candidate forum where Sen. Cook and representative Steinburg claimed sales tax had not been increased. Indeed, sales tax is still 6.75 to 7.5%, but it was expanded to cover labor and services. Thus, the low income car owner who takes his 15 year old Hyundai in for an oil change now pays sales tax on the labor as well as the oil and filter, the owner of the Mercedes 550SL pays the same amount. That increase in tax hurts the low income taxpayer more disproportionately than the wealthy taxpayer. A 6.75% tax on your scant discretionary income is a lot but 6.75% for a wealthy  taxpayer is chump change. One local quick oil change garage saw the sales tax they collect rise from $800/month to $3,000/month, mostly off the backs of the working poor. The Republican controlled government has undertaken a massive redistribution of wealth from the poor and middle class to the wealthy. 

Now to Social Security. Most Americans are not aware that wealthy taxpayers only pay Social Security on the first $127,000 of their earnings. The wealthy pay no Social Security tax on any income over that amount, neither does their employer. Removing the salary cap would mean Social Security would remain solvent for up to an additional 75 years instead of being insolvent by 2034 as is now projected. The lowest social security earners could also receive an increase to help them lift out of poverty. 

These are a few examples of the inequities which benefit the wealthy, in many cases at the expense of the remaining 99%. 

The proposed tax plan accelerates this redistribution and increases the deficit by another $1.5 trillion to boot. Republicans have taken on the tax and spend mantle. Meanwhile Mr. Hood beams out from the paper telling us how fair the system is and how corporations need more tax breaks, or we need to fund more “for profit” charter schools at the expense of our public education system. 

Mr. Hood, stop being so disingenuous. You pander to the greed of your wealthy patron at the expense of most Americans. I certainly wouldn’t call that a worthy American value, a Christian value or a family value. It actually sounds downright un-American to me! 

Richard Good

Elizabeth City