Tuesday, July 13, 2004
...don't have the means to shelter income as the super-rich like John Kerry and John Edwards do. When these guys talk about raising taxes on upper-income earners, they'll never get rid of the loopholes (many of which undoubtedly have good reason to exist) that allow men like them to pay far below their fair shares. That's why raising taxes on the rich almost never works, and the burden ends up falling on the great middle-class, who needs to utilize and keep exposed a far greater proportion of their income.
Instead of taking his $26.9 million in earnings directly in the following four years, he paid himself a salary of $360,000 a year and took the rest as corporate dividends. Since salary is subject to 2.9% Medicare tax but dividends aren't, that meant he shielded more than 90% of his income. That's not necessarily illegal, but dodging such a large chunk of employment tax skates perilously close to the line...
...Mrs. Heinz Kerry's finances remain largely a closed book, since she has so far refused to release her tax returns. What we do know so far is that she has prepaid $750,000 in federal taxes on $5.1 million in income for 2003--an effective tax rate of 15%. That is because a significant portion of the income came from tax-free municipal bonds, which is perfectly legal.
Even so, her net income must be much higher. We know that since the death of her husband John Heinz in 1991, Mrs. Heinz Kerry has invested shrewdly and possibly even doubled her inheritance. Even if one takes a conservative estimate of her net worth, say $1 billion, an income of $5.1 million means a paltry return of just 0.5%. More likely, the majority of her investment income is sheltered within trusts so that tax is deferred until she or her family actually wants to spend it. Again, perfectly legal, but this is a luxury that the average middle-class professional working for a wage does not have. These are the non-rich who will pay the bulk of any Kerry tax increase...
Also Edwards, son of a millworker, and anti-outsourcing, has about 5 million in an overseas investment fund.
Offshore Outsourcing is ok if you have a clear view of the things. For example India and Romania imports cars, computers, coca-cola, movies, MS Windows and in return they offer work force. See for example ROMsourcing.com , they are renting(!) highly educated operators in a Bucharest office for only $30/day (all expenses included). It is at least a fair deal. Don`t you think!?