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CAPITOL VIEW: Talk about tax rates can be dismissed as ‘class warfare’ PDF Print E-mail
Written by Wauneta Breeze   
Thursday, 14 July 2011 20:39

The purported budget cutters in Washington have a lot better deal than the Nebraska lawmakers.

In Washington, some of the so-called fiscal conservatives want to keep alive some tax breaks that ordinary Nebraskans would like to share in, on a much, much, much smaller scale.

Being fond of almost anything that will float, keep me dry and allow me to cast a line, it’s the fantabulous deal allowed for yacht owners that arouses the itch of envy.

If you have a yacht – not just a big boat, but a yacht – you can claim it as a second home!

It would be great to have a boat so big that it could serve as a real second home, but it would also seem to me that the thing would be an honest to goodness luxury.

The view from here: Fair would be fair enough. How about if those who own boats and buy bait (live or artificial), sunscreen, soda pop, life jackets and fishing poles and out-of-town lunches and breakfasts would be allowed to write them off their income taxes as “economic development credits.”

Think about the money that goes through anglers and into local economies. It’s a bunch.

And it’s even more if you add in the occasional speeding ticket and, for some possibly over devoted to drowning bait, the once-in-awhile divorce. And subsequent alimony!

And the State of Nebraska wouldn’t even have to participate.

Since it’s the House and Senate who are so fond of water-oriented generosity in the tax code, the tax mercy could apply only to income taxable by the feds.

Next on the list of “How about some for the little guy” is the matter of allowing the multimillionaires and billionaires who run hedge funds to declare what is really their income as “capital gains.”

Do you know what that means? It means that a guy with hundreds of millions of dollars in annual income only has to pay income tax at a rate of 15 percent!

We’re not talking entrepreneurs. We’re talking glorified management with battalions of employees (who also make comparative fortunes – compared with thee and me) who do the real arithmetic.

But, let’s say those hedge fund managers are worth what they take – if not what they earn. Or, let’s say they can keep it, and their tax break.

How about if ordinary Nebraskans only have to pay income taxes at the same rate as the guy who runs the company, but only if that rate is less than the employee currently pays.

Let’s say you have an income that puts you above the 30 percent level. If the company’s biggest big shot earns more than, say, triple your salary – but actually pays at a rate that is actually less than 30 percent – then you pay the same tax rate as them.

If the policymakers won’t consider that scheme (they won’t) then how about if the honchos have to pay at a rate at least equal to yours?

Some people might call such notions “class warfare.” They are entitled to that opinion. But from here it seems more like something less than schoolyard scuffle, with the little guy looking for survival, rather than the defeat of the other fellow.

Our guess is that such schemes will appeal to the majority of Nebraskans who don’t earn better than a million bucks a year – and to virtually all of them who made less than $10 million last year, and were taxed at 15 percent or less.

FULL DISCLOSURE: The latter would include the author.

 

ED HOWARD is the statehouse correspondent for the Nebraska Press Association.