To the editor: Your editorial did a good job explaining how the proposed Republican tax plan may or may not help lower- and middle-income earners, while pointing out that the proposed reduction of the current top individual tax rate of 39.6% to 35% and eliminating the estate tax and the alternative minimum tax provide significant breaks for the wealthy. (“Republicans’ ‘death tax’ fixation tells you all you need to know about their concern for the working class,” editorial, Sept. 29)
However, the most overlooked and probably least understood benefit to accrue to the wealthy under this proposal is the new 25% “small business” rate.
Large publicly traded companies operate as corporations that are taxed at the business level, and almost everyone else operates their businesses as “pass-through” companies. These entities pass their earnings through to their owners, who then pay taxes on this income at their individual rates.
Therefore, the proposal not only reduces the corporate tax rate to 20%, but reduces the top tax rate on all other business owners from 39.6% to 25%.
Wealthy business owners would pay a maximum 25% rate on their business income while some of their employees may pay at 35% on their earned income. It is incomprehensible how this is tax relief for the working class.
William Spina, Thousand Oaks
The writer is a retired certified public accountant.
To the editor: There is a death in the family, the descendants are in mourning and the vultures are hovering over the body. Why is the death an invitation for the government to feast on what is left after years of hard work and many taxes paid?
There is no justification to demand the children or heirs pay a large portion of what they inherit. If a business was started by the deceased, most likely he or she worked very hard and paid taxes over and over again when the wealth was earned and when it was reinvested and produced some more profits.
Then of course there’s inflation. A house purchased decades ago might now be “worth” a few million dollars, and yet it is the same house, maybe with some improvements. A business that started years ago with a few thousand dollars might now be worth millions, thanks to inflation and hard work.
So now the vultures are hovering over the dead body and are demanding their portion.
Why does the government think it is entitled to any portion of the estate? It received its portion already over the years.
Rachel Robinson, Los Angeles