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Letter: System’s goal is wealth redistribution

Published: Friday, April 12, 2013 5:30 a.m. CST

To the Editor:

Normally I do not respond to letters in the paper reacting to letters I have written.

However, print edition responses can distort positions and take them out of context without the original letter shown.

Therefore, I am responding to Reuben Nelson’s April 4 print edition response to my March 23 letter.

Nelson has his right to use the title, “system rigged to favor rich,” however I believe it is the opposite; our system seeks to redistribute wealth.

Today our system actually favors lower-income workers, giving them many perks and unearned credits, with one big exception: Yes, CEO pay is excessive in many publicly traded companies.

How large public corporations are taxed also is problematic. I agree the tax code favors some special interests. Dividends paid to shareholders, however, are available to any and all investors equally.

People can invest their money, or spend it on anything they want.

We should applaud those who choose to invest though, as we need more, not less, investment.

I am not upset, nor should anyone be, by providing a safety net for the truly needy.

I am troubled though about its bloated size, caused by too many able-bodied imposters who selfishly game the system.

Yes, taxation is reaching punitive levels, with the top federal income tax rate now 39.6 percent, plus payroll taxes higher now on higher incomes.

Add to that a new 3.8 percent Medicare tax on investment income for some, plus some state income taxes over 13 percent, plus city income taxes for some, property taxes, sales taxes, and many other hidden taxes, added altogether, that become punitive. Deductions also disappear for higher incomes.

Nelson is mistaken in believing that the top 1 percent pay a wage tax rate of 15 percent; that applies only to capital gains and dividends and now that’s also going even higher for some, while staying lower on lower incomes.

Overall, the top 1 percent of earners pay close to 40 percent of all federal income taxes. I believe Nelson’s statement that he is not mean-spirited, guilt-ridden or scornful is probably true, however, many liberals are, and that is unsettling.

Gerard McLain

Sycamore

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