Income of $50,000 vs. $50,000 earned is not the same thing / by kevin murray

The vast majority of working Americans are subject to Federal and State withholding from their paycheck, as well as in some localities also suffering the indignity of having taxes held for city taxes; in addition, employees are required by Federal law to have taken from their paycheck, 6.2% for social security taxes, as well as 1.45% for Medicare.  So then, those that have an income through their labor of $50,000 per annum, do not ever actually receive a net income of also $50,000 but rather are subject to various taxing authorities, in which, some of those taxes are thereupon recovered upon the filing of an Income tax return, depending upon a myriad of conditions.  Nevertheless, what is never recoverable, is those taxes so taken by social security and Medicare, as these are considered to be a given person's contribution to the safety net of retirement and recoverable only when they reach retirement age.

 

On the other hand, there are plenty of people that earn $50,000 and pay little or no taxes upon this, and further are not subject to the paying of 6.2% for social security or 1.45% for Medicare.  For instance, one of the prevalent ways that people with money, make additional money is through their investment in equities of all types, of which, if that investment in a given equity, is thereby held for one year, it is considered to be a long term investment, and should any portion of that particular equity thereupon be sold, then the taxation of such, would be subject to long term capital gains taxation rules, which varies depending upon the marital status of that taxpayer.  That is to say, for a single taxpayer, with long term capital gains so sold of $50,000, the first $40,000 of that income would be taxed at 0%, and the subsequent $10,000 would be taxed at 15%, for a grand total of $1,500 so due.  If, the taxpayer was a married couple, though, they would not be subject to any taxes whatsoever, for $50,000 worth of capital gains, is taxed for them at an effective rate of 0%.

 

Further, to the point, those that have capital gains, are not compelled by any sort of law, to sell any of their capital gains, so that, if they so desire, when they make $50,000 in capital gains or more in a given calendar year, they can simply roll that money so earned over, till next year, or the year after, or as long as they so desire.  In other words, those that are paid a $50,000 salary are compelled to be under the obligation of tax authorities, and will have to pay what they have to pay.  Those, though, that make their money through investments as in equities, will not have to pay a dime, if they do not sell; and if they do so sell, when they are savvy about such, will sell only that which will not trigger any tax liability, or the minimization of such.

 

It doesn't seem right that one party must labor hard to earn their keep and thereupon has tax obligations that must so be paid; whereas, another party earns the same amount of money, and pays not a dime, in which both of these parties, utilize the same roads, the same infrastructure, and the same governance, but only one of these is compelled by tax law to pay the piper, so of.