Tax Tips: A look at taxes and the Declaration of Independence
For the Nevada Appeal
Every once in a while, I like to pull out and read the actual wording of this great document that we are celebrating the signing of today. It is fascinating reading. I highly recommend it. You can find it on the internet pretty easily.
One of the most quoted sections is, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”
Later in this document, one of the listed grievances was … “For imposing Taxes on us without our Consent.”
Several recent new taxes have been foisted upon us (without our consent?) in the last few months. One is the “Surtax on Investments” hidden within the Obama Healthcare Reform. Basically, if your Married Adjusted Gross Income is over $250,000, and any of that is from unearned income sources such as capital gains, rents, interest, dividends, etc., starting in 2013 you will pay 0.9 percent more in Medicare Part A on wages, and 3.8 percent surtax on that unearned income.
What if you normally have less than $250,000 in Adjusted Gross Income, but you sell an investment or a business and for just one year, your income goes above that threshold? Congratulations! You are considered wealthy and “Prince John” (aka the U.S. Congress) says you must pay this surtax. Many of our clients have indicated that they do not feel better knowing that they are “volunteering” to pay more than others for healthcare reform.
The good news is that, thanks to those Founding Fathers that signed the Declaration of Independence, we now have a representative form of government that allows us to vote for those who best represent our beliefs and interests. If the federal, state, and or local governments enact a law that we don’t agree with, or go hog wild out of control with budget deficits, we can vote against them in the next election.
Stop a moment and think about what a wonderful gift this is. We no longer need to take up arms and have a violent revolution to throw off an oppressive government, we can just bide our time and vote them out.
Those currently in Congress might want to refresh their memories of the other less quoted phrase in the Declaration of Independence (speaking of the rights and duties of the governed) … “But when a long train of abuses and usurpations … it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.” This November, such a “throwing off” might occur? Who knows?
• Kelly Bullis is a Certified Public Accountant with over 30 years of experience. Contact him at 882-4459.