I work for an accounting firm and this morning I received this message. I found it extremely informative. Please read.
A very good friend of mine is an accountant with KPMG, one of the biggest accounting firm's in the country. She provided me with the following explanation in response to my concern about the general public's inability to see through the Bush "tax break" marketing tool. Bear in mind that Meryl is an Ivy League-educated white female accountant. Her sister, Meg, is also Ivy League-educated, but is a college professor. I am offering a definition as a preface to her message because it is a term I was unfamiliar with and had to look up myself.
cognitive dissonance n. Psychol. A condition of conflict resulting from inconsistency between one's beliefs and one's actions.
"I think many people who make a large amount of money, have a tendency to believe they did it all by themselves. They believe that if they can make it, anyone can make it. It is cognitive dissonance to think that your privileged position in our country did or does nothing to help you attain success. And you are privileged (i.e. you have an advantage) as a white male (or even white female) and there are more privileged categories besides being white or white and male: money, heritage, christianity, perceived education status (Ivy League), and more.
Throughout the past several years, I have had the good fortune to claim an income of over $200,000 on my tax returns. Did you know that my effective tax rate has been less than that of my sister meg, who earns less than a third of what I do? Bush and Co. will claim that big wage earners pay more than their fair share. After all, they pay the highest percentage of federal income tax, right? They conveniently forget that the people who have lots of money and lots of assets, have more tax breaks, which effectively ensures a lower rate of tax for them. The official federal tax rates are 10%, 15%, 25%, 28%, 33%, and 35% depending on what you make, ranging from $1 to over $311,950 per year. I am in the 33% tax bracket, but only on that income which is over $143,500, the rest is taxed at the lower rates.
Yes, technically people who make huge amounts of money are in a higher tax bracket (for that part that exceeds the limits), but the tax breaks (deductions, "losses," and credits) are expansive for people who have businesses or property and other assets. As an accountant working for kpmg, I can tell you that I personally know a lot people that make huge amounts of money (more than me) and pay an effective tax rate of less than 25% (which is what someone who earns between 28,000 and 69,000 per year has to pay). On last year's tax return, I had gross wages of $207,000 - I paid $23,000 in federal tax, after all of my deductions. That is an effective rate of a little over 11%. My sister Meg had an income of $68,000 and paid nearly $12,000 in federal tax or a little less than 18%. How is that fair?
I realize most people are not aware of this sort of inequity, but the people I work with are very aware of this, as is Bush and as are the politicians in Washington... they just don't care! Please excuse this HUGE diatribe - but I couldn't help myself."
This info may come in handy for those of you who have either undecided friends or know a 'soft' Bush supporter. Every little bit helps to break down the spin machine and sway them to KE!!!