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The Clintons Already Pay A High Tax Rate As Hillary Clinton Proposes Raising It

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Last updated on July 17th, 2023 at 09:03 pm

*The following is an opinion column by R Muse*

Most Americans regard income as money earned for work produced or the profit from goods sold. Actually, for tax purposes there are different classes of “income” that benefit the extremely wealthy and allow them to pay a lower rate than many middle class Americans. However, not all upper income earners, those most would call the “one percent,” pay a low tax rate and if it is former President Bill Clinton and current Democratic candidate Hillary Clinton, they are paying a steep tax rate for “income” most Americans would not consider earned as the product of work.

The Clintons, Bill and Hillary, certainly aren’t out digging ditches or assembling electronic components, but they do earn consulting fees and royalties from book sales and in 2015 the pair earned a little under $10.6 million. However, well over a third of those earnings, $3.6 million in fact, was sent to the U.S. Treasury in the form of federal tax payments. According to the Clinton’s recently released 2015 tax return, they pay a high tax rate of 34.2 percent. That rate is near summit of the very top-tier income earners in America, and yet very, very, very few filthy rich Americans in that highest income-tax bracket ever pays close to the 39 percent rate. Why? Because although income is income, high income earners are able to take advantage of inequitable tax breaks and loopholes that reduce their rate drastically; often lower than middle class “income” earners.

According to tax law experts, the Clinton family pays a high rate because they do not employ hardly any of the “tax dodges” or deductions as the other wealthy Americans. Although the Clintons are high income earners, where tax purposes are concerned their high income is treated like ordinary working Americans who do not have access to, and are prohibited from using, specialty loopholes, creative dodges and deductions created specifically for the richest Americans.

The editor of the ‘weekly’ publication Tax Notes International, Stuart Gibson said: “There are no tricks or gimmicks here. These are white-bread returns.” According to the tax code the Republican Party claim is inherently rigged against and unfair to the poor beleaguered richest Americans, nearly all of the Clinton’s income was earned from working rather than from investments, interest or deferred compensation. That “type” of income from working eliminates the preponderance of options open to the one-percent to exploit the tax code’s loopholes; loopholes allowing wealthy taxpayers to pay a much lower rate because they didn’t do any “work” or produce anything to earn their tens, maybe hundreds of millions annually. Apparently, no matter how much money the wealthy “earn” on investments, that income is not the same kind of income as the landscape contractor, former president, or best-selling author who have to declare and pay taxes on all their “income” from actually working.

This is prescient to the election as Republicans, with wealthy tax dodge Donald Trump at the helm, are again claiming that the key to prosperity for the masses is giving the super-rich greater tax breaks; and when they say tax breaks they mean eliminate them. One of the ways the rich like Willard “Mitt” Romney pays a lower tax rate than this lower-middle class author is because the majority of his “em>income” is in interest and investments; that doesn’t include the hundreds-of-millions the greedy Mormon stashes in offshore tax havens linked to his “former” company Bain Capital.

A couple of weeks ago when the GOP’s angry fascist, Donald Trump, offered up “his” tax plan it included eliminating a fair share, if not all, of the taxes the wealthy have to pay on their special kind of income. Although the tax rate for the wealthy is stated at 39 percent without any regular deductions, the rate for interest and investment income is considerably lower.

For example, for the high-income Americans who earn over $20 million, a majority of their income is from investments. Besides investment income being taxed at a lower rate than labor income, the super-rich can legally dodging taxes and are to use offshore accounts. As noted here, a corporate CEO may earn several million dollars in base pay that qualifies for a tax rate as “labor income.” But the majority of their “special income” is typically in the form of deferred compensation in the form of stock grants which are taxed at much lower rates than a top earner who “works.”

One of taxes that hedge-fund managers and private-equity barons like Willard Romney called for eliminating was tax on “carried interest” that is a special provision specifically created to slash the wealthy’s tax burden, significantly. Trump claims his tax plan will abolish the “loophole,” but as the president of Crown Capital Management Scott Fearon said, “He’d be doing me a favor. He’d be cutting my taxes quite a bit.” Quite a bit means reducing “investment managers’ tax rates to 15 percent” down from 24 percent.

Since Donald Trump is not about to release his tax returns, one can look at Romney’s 2012 return showing $13.7 million in “income.” However, for that year and the previous one Romney’s tax rate was only 14 percent on nearly $14 million in “income” each year; that he actually declared to the IRS. That 14 percent is roughly 20 percent lower than the Clinton family paid because “virtually all of Romney’s income came from investments, which are taxed at the capital gains rate of 15 percent instead of the 39 percent rate on labor income.”

It is noteworthy, and goes to Hillary Clinton’s character, that her tax plan includes an extra tax increase (4 percent on income over $5 million) on the highest earning Americans that will certainly affect her and raise the Clinton family tax rate. She would also cap the value of many of those special tax deductions that benefit only the wealthiest taxpayers. In fact, all the changes would “raise taxes in 2017 for the richest 1 percent by $78,284, reducing their after-tax income by 5 percent,” according to the Tax Policy Center.” The purpose of the increased taxes on the wealthy will pay for “traditional Democratic proposals such as expanding access to higher education according to the Tax Policy Center.”

There are still a fair number of Americans who are convinced that a Clinton presidency will be a monumental gift to the rich; particularly for bankers, Wall Street, and investment schemers. That can hardly be the case because her tax proposals specifically target those groups for significant hikes that will certainly affect the Clinton family’s tax bill.

It is prescient that the Clintons earn enough to qualify as the upper-echelon of income earners and could just as easily as not spirit those earnings away to avoid paying their fair share. Instead, Clinton wants to raise taxes on the rich, including the Clinton family that will be paying close to a 43 percent tax rate in 2017 if her proposals were enacted. It is a significant increase from the 34 percent rate they paid in 2015 and it should inform exactly why Republicans are terrified of her winning in November.

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Rmuse

Audio engineer and instructor for SAE. Writes op/ed commentary supporting Secular Humanist causes, and exposing suppression of women, the poor, and minorities. An advocate for freedom of religion and particularly, freedom of NO religion.

Born in the South, raised in the Mid-West and California for a well-rounded view of America; it doesn't look good.

Former minister, lifelong musician, Mahayana Zen-Buddhist.