Edwardsspeak

I shouldn”t have watched the Vice Presidential debate tonight (just like I shouldn”t read Rolling Stone). That smug little talking haircut (John Edwards) just makes me ill. He talks so sweet and so passionately, I think most people just skip past the meaning of what he says.

But TiFaux and the Internet are great tools for cutting through the silver-tongued lawyer B.S. and finding the reality.

For instance, during an exchange about tax philosophy, Edwards threw out this line:

“The country needs to know that under what they [Bush/Cheney] have put in place and want to put in place, a millionaire sitting by their swimming pool collecting their statements to see how much money they are making – make their money from dividends – pays a lower tax rate than the men and women who are receiving paychecks for serving on the ground in Iraq.”

What a great mental image for Joe and Jane Workingclass. The evil “millionaire” – who of course does nothing but sit by the pool all day – pays a lower tax rate than those poor kids dying in Iraq.

First off, I love the “millionaire by the swimming pool” reference. That”s such a classic Democratic line. Edwards, of course, is a self-made millionaire who came from a poor family and worked his ass off to get rich. Does he really think the “millionaire by the swimming pool” is typical?

Maybe he”s thinking of Kerry, who of course got rich by marrying rich women.

But let”s cut out the closing-argument-speak Edwards was so good at as a personal injury lawyer and look at what he”s saying. It”s essentially this: tax rates on dividends are lower than tax rates on the salaries of soldiers.

Bush pushed through a dividend tax cut that puts the rate at 15% for all dividends. That”s a fact. I”m not going to get into a lecture about the effect lower dividend tax rates have on capital investments, but there”s sound policy behind the rate reduction.

So what does a soldier in Iraq make? That”s harder to know, but according to the Army, a sergeant with 6 years” experience makes $25,567 a year, and those serving in Iraq get an extra $3,800 or so per year in hazard pay. That”s just shy of $30,000, so let”s round that up to there.

If this hypothetical sergeant is single with no kids, he”d have taxable income of $22,200. The IRS tax table says he”d owe $2,984 – 13.4% of his taxable income or 9.9% of his total income.

Isn”t 9.9% – or even 13.4% – less than 15%?

Maybe Edwards is talking about those soldiers who have taxable incomes above $32,000 (the threshold where single people reach a 15% effective tax rate). It”s more likely, however, that he”s defining “tax rate” as the marginal rate – which means any single taxpayer who has taxable incomes above $28,400, where the marginal rate goes from 15% – 28%.

Is he technically correct in this charge? Since he can bend definitions to suit his needs, probably so. Lawyers are good at taking a sliver of truth and making the most of it.

But let”s look at the reality of the scenario he threw out in such a vivid, class-envy sort of way.

Let”s assume the millionaire sitting by the pool reading his dividend statements all day earns $200,000 a year – the income level that makes you “rich” in Kerryland – in dividends. At the 15% tax rate, the millionaire will pay $30,000 in federal income tax.

I guess that”s where the soldier”s paycheck comes from.

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