Friday, August 19, 2016

Do the rich pay enough?

As a tax professional, I’m often asked by clients whether or not I believe the rich pay enough in taxes.

My response is to consider this…… Consider that the rich have never paid any taxes…. Never have, never will.

The only people who pay taxes on this globe are the people who have no one to pass the cost on to.

When the price of my tax software goes up I have three choices, make less money, cut other expenses to make up the difference or raise my prices. Now I’m damn sure not going to take lower pay for the same work. You can only cut other expenses so far. That leaves increasing my fees for service.

When I increase my fees, my clients have the same dilemma. More often than not they will increase their prices.

That process continues until the last guy on the food chain tries to pass the hot potato to the next guy and guess what? There is no one else. They get to eat it.

Increases in taxes on the rich are no different than increases in utility costs, rent, widgets, etc.

Last year, I did tax returns for four clients who had W-2 wages in excess of one million dollars. In two of those cases, the CEO’s and CFO’s had their compensation adjusted by their corporate boards so that recent tax increases wouldn’t dent their take home pay.

You know who loses? The American worker who’s wages are now squeezed or jobs shipped overseas to afford the increases to those in management.

And if you think there is policy or another way to stop that, you are desperately naive to the point that you probably think there's a cure for gravity.

Consider that.

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