If you've met my husband you know he gets ticked when people dont do their research and speak without all the facts, so here is a brief lesson in double taxation, just to clear up all the misunderstanding. FYI I am not voting for Mitt Romney, please dont take this as an endorsement (not that anyone cares but just thought I would throw that out there).
Recently, much of the political conversation has focused on tax rates. Unfortunately, most of the news conversations I’ve heard purposely ignore certain details.
As with any technical subject, one can paint an incorrect picture if they pull things out of context. In our system, different types of income are taxed differently, and there are usually reasons for it. For instance, money I receive from my job is taxed differently than money paid out by a corporation I own. Often times that money is taxes more than one time along the way, so looking at only one of those taxes doesn’t tell the full story. The biggest example of this is when people claim that “rich” people only pay 15% in taxes on money earned from their investments. In reality, income earned by large corporations in the US are taxed at 35%. Then, when that money is paid out to the owners, the federal government gets another 15% of what’s left. However, that first 35% doesn’t show up on personal tax returns. This process of taxing the same money multiple times is often referred to as “double taxation.”
The picture is much more complicated than what you hear from politicians. But the details they leave out DO matter. When someone has multiple types of income, you can’t judge their taxes by just looking at their personal tax return any more than you can learn to cook Thanksgiving dinner by just watching someone carve the turkey.
Does Warren Buffett pay a lower tax rate than his secretary? If you looked only at his personal tax return, you may think he does. But when you look at all the different taxes taken out before he sees his money, the answer is clearly “No”, and Mr. Buffett is fully aware of this.
If you’d like to hear an expert’s opinion on this, here’s a quick article from the NY Times written by a Harvard economics professor.
http://www.nytimes.com/2010/10/10/business/economy/10view.html
Ashley’s Brief and Very Limited Understanding. Let’s pretend for a moment that I decided to open a donut shop and it was wildly successful (because why wouldn’t it be). I owned and operated the shop for 15 years averaging a salary of $1million per year. During this time my average federal tax rate was about 31% (pretend I live in Texas so the issue of state income tax is irrelevant). After 15 years I decide that I hate the hours a donut baker works and I close down my shop, but I decide to take some of the money that I had earned while working in the shop and invest it. I invest $1 million in stock in Company XYZ. I keep my money in Company XYZ’s stock for 2 years, but after that time I decide I am risk adverse and that I would rather the money sit in a savings account (even though it is above the FDIC insured amount) so I pull my money out. Turns out that during the 2 years my money was invested, stock in Company XYZ went up 20% so I made a bit of money on my original investment. By the way, in the meantime Company XYZ is paying 35% in taxes on their earnings, if that wasn’t being paid my payout would actually be more…When I take the money out it is taxed at 15%. Since I am no longer working at my donut shop, and I am not bringing in any additional income (besides the gain off these investments) it looks as if I only paid 15% in taxes… even though Company XYZ paid 35% on my money, and I paid the original 31% on the money invested.
Then I ran out of black thread and stopped doing the blanket stitch (it became and every other one sort of thing).
Within the past week I have read two “articles” I found heartwarming, interesting, and more than a little comforting (look here and here). They describe my experience the past 6.5 months. Before I go on I have to say that I love motherhood. It has taught me about real love, helped me gain patience with myself and others, and strengthened my testimony of prayer on a daily basis, but with all that, I have to admit that I have found these past few months the most challenging of my 25 (and 2/3’s) years. I know I have posted about my transition from the working and academic world to motherhood more than once in recent months, and the topic is probably boring all 2 of my readers, but lets revisit.
Before Michael was born I wondered what I would do all day with “just one baby”, I thought there would be hours and hours to fill, and in some ways there are but in some ways there aren’t. I thought I would have things under control, because let’s face, I love to be in control (funny I hate manual transmission cars). I thought one child would be a breeze, after all you see families with 5 or more kids and the moms seem well rested, beautiful, and in control of their lives. I will admit that one is more challenging that I anticipated. I am not whining, just admitting that some days it is tougher than I thought it would be. I think “just one” has been tough because everything is new. Before Michael I hadn’t dealt with a sick baby, teething, sleep training, explosive poop etc. There are things that people tell you watch out for, but that can’t prepare you take it on yourself. In some ways I think that being the mother of “just one” is like a bad movie where every day is the first day at a new school. No matter how many times you get through that first day, you can’t seem to get out of the loop (think Groundhog Day but with poop). Every day is new, every day is an adjustment, and every day you are trying to find you place, your niche, and your routine. Some days things just click- Michael takes two naps, I get ready, we get things done, and bedtime is a breeze. Some days are not like that, some days I am ready for bedtime to be 5:30 instead of 7.
Someone told me that being the mother of one gives you more time to worry and fret- I don’t know how life would be with 4 but let’s say, I was so worried that Michael wouldn’t learn to roll over that I lost sleep- something that I might not be so worried about with his siblings. Being the mother of “just one” also gives plenty of time for self evaluation and dare I say self criticism. It gives me plenty of time to wonder if I let him spend too much time in the bouncer, if I didn’t read enough books (or forgot to read to him entirely), it gives me time to worry if I spent enough one on one time cuddling the poor guy, playing with him, and attending to his needs. It makes me wonder if I should have spent more time helping him roll over rather than making dinner, vacuuming, talking on the phone or any number of other activities where I wasn’t giving him 100% attention. With more than one, 100% attention all the time wouldn’t be realistic and I hope will be less of a worry.
As I have muddled my way through these past 6 months I have to think that the next one will be easier in some ways (and no the next one is not on the way). I will know to expect to be tired, I will be used to the endless diapers, and I will know when a cold is just a cold. I will also know about the good things- babies that laugh and smile, happy babies in the tub, and the smiley baby after his nap. So until that time we will continue to cross our fingers and hope he turns out ok, and I will come to accept that being the mother of “just one” is much harder than I thought it would be.
This past weekend I had a missionary(ish) moment at Costco, yes that is right, Costco- the place where dreams come true and you cant get out of the store for less than $100. Anyway, Brian, Michael, and I went to Costco because diapers were on sale and as those you with children know even $1 off a box of diapers motivates you to go into the store (don’t worry it was $5 off a box). As we walked to the diaper section we passed by one of the “roadshows” they had set up in the front of the store. Generally, I just pass right on by because I don’t need or want anything from these outside vendors, but yesterday I had to stop because they were selling “Mod Bod” shirts- you know one of those Utah brands that sells the extra long shirts. I started browsing the shirts- just to see which colors they had and the sales woman approached me to explain how the shirts worked. I let her know that I had lived in Utah and was wearing a similar shirt so yes I understood they were longer than you average tshirt. This is where the missionary(ish) moment started, the saleswoman turned to me and asked if I was LDS. She then went on to explain that she was a Jehovah’s Witness but that she had lots of contact with “LDS” because of her job (selling modest clothing for a Springville based company). She said that she loved interacting with “LDS” because they all had a “light in their eyes”, and said that the “LDS” should tell their leaders what wonderful people they were. While it wasn’t a true missionary moment it was interesting to talk a bit about the church in Costco while buying a tshirt.
Ohh tv!
See the West Wing is fascinating for all ages.
