Columnist shows lack of knowledge on tax policy
In his Dec. 22 Op-Ed piece, Ralph Martire once again demonstrates his bias and lack of knowledge regarding tax policy. His claim that it is unfair to cap the SALT deduction because it creates double taxation ignores the reality that income is subject to multiple tax regimes.
Wage earners do not get to deduct Social Security and Medicare taxes from their income before calculating tax. Corporations pay taxes on their income, pay some form of their net gain to stockholders, and those stockholders pay tax on the dividend payments. And in the great state of Illinois, we pay state income taxes on gross income, not federally defined taxable income.
His claim that it's unfair that the changes in tax code benefit current taxpayers is also misguided. Consider a system in which no income below $1 million was taxed, and all income above $1 million was taxed at 100 percent. Then, the tax law was changed so that income above $1 million was taxed at 90 percent, with incomes below $1 million continuing tax-free. All the benefits of the change would go to the wealthy, but they would continue to pay all the taxes.
An honest observation might have been that, as corporate taxes are reduced, perhaps the tax rate on unearned income, like dividends and capital gains, could be increased. This would make our corporate tax system more competitive and shift a bit more of the burden to the wealthy, who are more likely to benefit from increased dividends.
Tim Hein
Palatine