Thursday, October 16, 2008

Real Stories of "Wealthy" Americans

Following the meteoric rise of Joe the Plumber, stories about all those horrible rich people in America that need to be taxed more (From The Corner):

Joe The Lawyer:

I’m Joe the Lawyer.

After dropping out of high school and spending 4 years in the USMC (1963- 1967), I met the woman of my dreams, married, borrowed $500 to buy our first house, did college and law school at night while working full time, had 3 children, educated all of my kids through college (total cost $340,000…none tax deductible), started my own law practice with $25,000 of borrowed funds 32 years ago, have consistently employed between 2 and 11 employees the entire time, never missed a payroll and have earned about 175,000 to $250,000 per year over the last 10 years.

The American Dream, right?

Well, not having worked for a big corporation or a state or federal govt entity, I’ve had only my own savings to accumulate in a 401K for my retirement. I’m now 64, have a mortgage of about $750K (refinanced for college expenses) and can’t retire on my 401K (especially now with the recent market downturn) unless I sell my house (if I can find someone who will buy it) and severely reduce my standard of living.

So, my strategy (assuming my health continues good) is to work until I’m 70, earn as much as I can (this year I’ve worked an average of 60 to 65 hours per week), pay down my mortgage as much as possible and save, save, save. Sure, I’ll make more that $250,000 this year but I’m working the equivalent of 2 jobs.

Not sure where I went wrong here. Started with nothing; married 40 years; 3 kids grown, educated and off my payroll; and can’t retire until earliest age 70. Obama wants to tax me some more, further extending my working life.

$250,000 per year seems like a lot until you look behind the number. Thinking of letting my 6 person staff go, keeping only my secretary and cutting back on all expenses. Then, even if my taxes go up, I ought to be able to save more.

Of course, 6 jobs will be lost.

Mark The Trucker:

I am married to Mark the Trucker. He owns a small transportation business (approx 15 employees). He started with one truck in 1978. I'm pretty proud of him. He was also my high school sweetheart and still a hunk.

Anyway, the point I want to make is that small businesses are usually S-Corps or LLCs, and that means what they cannot deduct as business expenses is taxed as personal income. That puts most small business in a higher tax bracket than the one they would qualify for if only their real earnings were taxed. Also, this predicament disqualifies their children from receiving financial aid for college—we are "wealthy" by FAFSA standards.

In the transport industry an owner has to keep sinking-fund, so to speak. Engines blow up, accidents happen, and the price of replacing an 18 wheel tractor or a specialty trailer is very expensive. My husband is taxed a higher rate on income that is really not income. He puts a large percentage of it back into his business, as I know most entrepreneurs do. We live on a modest percentage of what appears "wealth" to Senator Obama.

My husband's employees understand that. They see how we live and they respect their boss because he pays a fair wage and does provide health care and contribute to their 401ks. He's not a Fat Cat or Robber Baron.

They recognize every time they pass through the toll booth and the EZ Pass registers that their boss is being taxed. They see more taxes when they fuel his rigs. They know that Interstate permits are more taxes. He pays Unemployment and Workman's Comp, as well as half of their Social Security taxes. They recognize this.

And ... they all vote Republican.

TyroBlogger's own story:
My parents both worked for the state of Colorado for almost their entire working lives. They are both retired now and in their 60's. My mom was an elementary school teacher. My dad worked for the Department of Corrections. He was a teacher during most of that time. He taught inmates so that they could pass their GEDs and hopefully get a job when they got out of prison. I can't imagine teaching kids let alone adults who act like kids, but he did it everyday for 30 years. Paid his share of taxes for 30 years. Paid into social security for 30 years.

My parents built the house I was born in. They still live there today. It is a modest 3 bed, 2 bath house that they have updated over the years, but there have never been luxury purchases (besides a hot tub that rarely worked). They put my sister and me through college. We were always provided for, but my parents have never been what one should consider "wealthy."

Earlier this week, I was talking to my dad and he said he had to go to a meeting about Medicare (he'll be 65 next year). He said that his Social Security check will just about cover his Medicare premiums. I asked how much his Social Security check was, he said about $105/month.

After 30 years of paying into Social Security he gets $105/month. You know why? Because he has a pension from the state and Ted Kennedy added something to the Social Security laws that classify my dad as receiving a "windfall" from his pension, so his benefits get reduced.

Yes he can live on his pension and no he doesn't make more than $250,000 per year, but in some government bureaucrat's mind, he is too wealthy to receive what he put into the system. Someone else, someone who probably has contributed less, will get his share. The point is that whenever you give anything to the government, you are unlikely to get it back.

These are real stories about the horrible fat cats in America who should redistribute or "share" their wealth under Obama's tax plan and the Democrats view of "fairness". People like Joe The Plumber, Joe The Lawyer, Mark The Trucker, and my dad.