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Gary Horton: Of toilets and tax breaks

Posted: June 27, 2012 2:00 a.m.
Updated: June 27, 2012 2:00 a.m.

A couple of weeks back, when Congressman Howard “Buck” McKeon, R-Santa Clarita, stopped by the local Starbucks for a little shoulder-rubbing, the otherwise joking around event took a tenser tone when jumpy Jeff built up a head of steam over Republican tax policy. Jeff started out calmly enough, but then pretty much let Buck have it.

“Do you really $@#&^# !@# believe it’s fair for a guy as rich as Mitt Romney to pay 14 percent on his income, when more regular folks pay 30 percent and higher on earnings that are much more dear to them than Romney’s 2nd, 3rd, 4th, or 14th million to him? (To this day, we remain ashamed for Jeff’s sake, and we in no way condone his behavior.)

Well, things got a little awkward for a moment. But Buck kept his cool and slid right into well-oiled talking points on the difference between capital gains and ordinary income, and how you can’t tax capital and expect folks to keep it around to grow the economy.

An arguable position, perhaps — but Jeff countered that guys like Romney make their money managing capital in much the same way that mid-level managers make money managing people and skilled tradesmen make money manipulating materials. Manipulating assets for capital gains and “carried interest” is the job Romney does. Is that so different than the way the rest of us work? Why should he and others like him gain up to a 50-percent tax reduction compared to others who just happen to work in different ways?

And to be fair, incremental earnings for the wealthy, after cashing their third or fourth million, must mean less comfort and joy than capturing the next incremental dollar for those on tighter ropes.

When additional after-tax earnings might mean new braces for Johnny for most but perhaps a new mansion for the truly wealthy – it feels almost third worldish that real-world tax rates drop for those worth far more and need incrementally far less.

Jeff continued that common sense suggests the deck is stacked against the regular guy trying to play “catch up and get ahead” when the regular guy pays 30 percent on his little stack of cash while the rich often pay 14 percent or less on their giant stacks.

Easy math shows a growing disparity of retained wealth between classes with every taxable iteration. Still, the concept of regressive, wealth-based taxation remains abstract for most.

A humorous real life story might bring matters closer to home.

Carrie and I were invited to a gathering with the boss of a friend’s son. The man is very talented, works very hard and very smart, is very wealthy and owns a beautiful home overlooking the ocean. He has earned everything he’s got. But now that he’s got a whole lot, he’s also edged into that tax sweet spot where he pays less on his overall earnings than he used to when he was more modestly wealthy.

He makes much income now from managing money and investments — and tax rates for this kind of work can be far less than for other types of work.

The man had just made a new purchase with which he is very pleased. He’d first used one in a five-star luxury hotel in NYC, and from first flush, he knew he just had to have a fully digital, automated, calibrated, space age toilet. His new, hyper-modern, hyper-sanitary toilet is bluetooth- enabled, streams his choice of music and has a remote that can be coded for multiple users.

This elegantly technical solution to our common age-old problem warms his seat, warms his feet and warms the water and air that automatically washes, dries and pampers most private parts when the user is done with his or her otherwise universal human act.

Commented an installer on a YouTube blog, “I renovate houses for a living, and I’m working on some rich dude’s place. He has this toilet. I gave it a try and let me tell you, it is worth every penny. My butt was in heaven.”

Our new friend had just paid about $7,000 to have his own wonder-toilet installed, and, like the installer quoted above, raves about his new defecatory acquisition.

It’s an interesting observation that our friend paid for his wipe-less, feet-heating, butt- caressing, iPod-enabled toilet with earnings taxed at approximately 20 percent, while most of us buy our every man toilet paper with incremental earnings taxed at 30 percent and higher.

In essence, our Bush-era tax code provides this upper one percenter a 33 percent tax break to never have to wipe his own butt or risk dirtying his hands again. In America, as the world over, it’s good to be king, sitting comfortably atop a royal throne — paid for by the masses.

Gary Horton is a Santa Clarita resident. Full Speed to Port appears Wednesdays in The Signal.


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