Mitt’s taxes part 2

Tax

Tax (Photo credit: 401(K) 2012)

If we ever learn about Mitt’s tax history, no one will care. I posted a blog post entitled Proposition 13 and tax reform in which I advocated the abolishing of the property tax and the sales tax, to be replaced by the graduated income tax and a wealth tax on net worth. Let us crunch a few numbers and see what Mitt’s taxes might have been if my proposals were adopted. In 2011, Mitt paid about $2 million in Federal income tax on $14 million, a rate of about 14%.

Say that Mitt made $14 million and paid a Federal rate of 30% or $4,200,000.
On an estimated wealth of $250 million, he would pay 1% or $2,500,000 annually, for a total $6,700,000.

If he lived in California for tax purposes and the state levied a state income tax of 40% of the Federal income tax and 20% of the Federal wealth tax, his state taxes would be:
40% of $4,200,000 or $1,680,000 and
20% of $2,500,000 or $500,000 for a total of $2,180,000 to the state of California.

On an income of $14 million, Mitt would pay Federal taxes of $6.7 million and California taxes of $2.18 million for a grand total of $8,880,000. That would be a combined rate of 63% leaving Mitt with only $5,120,000 after taxes to live on. That works out to nearly $100,000 after taxes every week of the year. I could happily live on just one of those weeks’ net income after taxes.

Half-full or half-empty

Aerial photo: Santa Barbara, California

Aerial photo: Santa Barbara, California (Photo credit: Wikipedia)

Fill a glass with your favorite beverage; drink half of it, and then put it down and look at it carefully. What do you see? Is the glass half-full or is it half-empty? It is all a matter of perception.

For six years in the 1990s, I worked two part-time jobs at a hospital in Santa Barbara, California. One job paid around $9.00/hour while the other, easier job required more training and paid $20.50/hour. Both jobs lacked full-time benefits. I loved my schedule because every week of the year had a different work schedule. I worked a variety of shifts around the clock and floated from department to department. And although I loved the variety, the payroll department made frequent errors in computing my salary.

We received our paychecks every other Friday around 11:00 am. I enrolled in direct deposit so my check was only for my information. During one particular period, I had worked 58 hours and I was expecting a check in the amount of $900+. When I opened the envelope, I was shocked to see that my take-home pay was $3,900+. The gross amount of the check was $8,100+. That meant that slightly more than half had been deducted for Federal income tax, state income tax, Social Security, Medicare, State Disability Insurance, charitable deductions and other. I was incensed that so much was deducted, and I was elated at the amount of take-home pay, $3,000 more than I was expecting. I brought the error to the attention of payroll, but since it had been directly deposited, there was nothing they could do that day. On Monday, I wrote a check to the hospital to correct the error.

I calculated that if I worked full-time at the $205.00/hour rate that they had used to miscalculate my salary instead of the correct rate of $20.50, in a year I would earn $400,000+. Even if deductions exceeded 50%, my annual take-home pay would be $175,000+. At that time working part-time, my net pay was around $25,000/annually. Would I have been happy with $175,000/year instead of $25,000? You’d better believe it.

So it’s all a matter of perception. Of course, I would like take-home pay to be more and deductions less. Still it is much easier to make ends meet with $175,000 than it is with $25,000 and this occurred about 15 years ago. Economic times have only gotten more difficult.

Young Guns part 2

English: Official portrait of Congressman Kevi...

English: Official portrait of Congressman Kevin McCarthy (R-CA22) (Photo credit: Wikipedia)

The GOP members of Congress who style themselves as the Young Guns are Paul Ryan, Eric Cantor and Kevin McCarthy. McCarthy may be the least known of the three, but he also may be the one who does the most damage. Representing the California district that includes Bakersfield, his job is to recruit GOP Congressional candidates. Describing the qualities he is looking for, he makes it sound as though the perfect candidate is a TEA Party/ Young Guns clone. If the next Congress is as obstructive as the current one, we will have McCarthy and Elbridge Gerry’s legacy to thank. The GOP has Gerrymandered several states since the 2010 election.

Please see  Young Guns

State banks

Big Sur, California

Big Sur, California (Photo credit: the_tahoe_guy)

 

There is a move afoot to set up a state bank in California, owned by the state, to provide competition to the too-big-to-fail commercial banks that are too few to really compete. Since I no longer live in California, I am not familiar with the details, but I hope that the bank becomes a reality. Our present financial system is really set up to serve the banks, not the banks’ customers. That must change. The banks consume too large a portion of the gross domestic product, leaving too little for the rest of us. In other words, we are all poorer to make our financial institutions richer. Once California shows the way, it is my hope that other states will see the light and set up state banks of their own. Commercial banks will be forced to offer less costly services and treat their customers better or risk losing them to state-owned banks.

 

Good news

The California State Capitol building in Sacra...

The California State Capitol building in Sacramento. (Photo credit: Wikipedia)

Good news or perhaps great news if you are a resident of California, a former resident of California who still loves the state or just someone who supports good and progressive government. In the election yesterday, Democrats became the majority party in Sacramento in both houses of the legislature, In fact the Democrats now have a super majority in both houses. That means that Grover Norquist‘s influence in the state of California is greatly diminished. Not only is Grover Norquist the guiding evil genius in Washington orchestrating GOP obstructionism, he is also active doing similar work in the states.

I have been a member of the Barack Obama Truth Team and as such, I have subscribed to many right-wing blog sites that I would never have read otherwise. One of their favorite topics besides lying about Barack, has been defaming the state of California. I trust that the changes in the party structure in Sacramento will start to change that.