Liberal Lies - Calling them out

A low-income client of mine asked me to compute her estimated tax payment for January 15th.

You see, some years back she had inherited some stock, and in 2009 the company was acquired and created what was essentially a forced sale of that stock. She wanted to make sure she had her taxes paid.

I spent a couple of hours computing the holding period and the amount of forced gain, then punched it in to the tax software and came up with the astounding realization that the transaction would not be taxed!

Wow!

I then went back and verified what I had once known, but had forgotten about since I have so few "low income" clients. And that is this:

Under the Bush tax cuts, low income people pay ZERO tax on long-term capital gains for 2008 to 2010. Zero, zip, nada.

I then informed this client that even though this was a forced sale, she should be happy it happened in 2009. Why? Because the Bush tax cuts will expire after this year. If this same transaction were to take place next year in 2011 -- her tax bill would be $6,980!

This applies for low income people only, and has nothing to do with middle or upper income taxpayers.

Read this again: When the Bush tax cuts expire, this low income taxpayer would have paid nearly $7,000 in extra tax.

Now -- How many times have we been told that the Bush tax cuts only benefit "the wealthy?" Hundreds? Thousands?

I can't tell you how often I tried to explain to people that this was total bullshit -- all taxpayers benefited from the Bush tax cuts and that in fact lower income people made out the best. But no, we never heard that. All we've heard for the last 8 years was that the Bush tax cuts were for the wealthy.

Well, I'll tell you what -- when the Bush tax cuts are allowed to expire, there are going to be a lot of pissed off people, and the economy will slow yet again. That's fact.

Let the liberal lying continue.