Wrong. Remember I said tax laws favor the rich? First, “capital gains” aren’t taxed at as high a rate as ordinary income. (Why?) Second, there’s a legal way you can avoid paying any taxes on this kind of capital gain – a “tax-deferred exchange.” We did our homework and wound up “trading” for two duplexes closer to home. Full taxes on that capital gain will be paid only if we sell the duplexes before we die. But if our heirs receive them, they get to use the value at our death as their “basis” (beginning value) and they will avoid that huge capital gain from our original sale.
I’m not giving legal advice – talk to your lawyer! This is a tiny peek into how someone can make lots of money and pay few taxes – legally – in our system. I can’t begin to tell you about off-shore accounts and all the other legal dodges the rich employ.
That, I believe, is why Mr. Romney won’t share more tax returns. He is ashamed – he paid a lower tax rate than the women who work two jobs to feed their children, the men who sweat to fix our roads, the workers who labor in packing plants. He should be ashamed. We should all be ashamed.
That’s why I’ll vote for Obama. Yes, the Democrats love money, too, but through the years they’ve come much closer to fair taxation.
Most important, regardless of who is elected, let’s all study, write, push, picket and scream until our tax code requires that everyone pays a fair share – even people who manage to sell their California homes before the next earthquake.