Problems from a CPA

Friday, May 24, 2013 — Week of Proper 2, Year One

Jackson Kemper, First Missionary Bishop in the United States, 1870

[Go to http://www.missionstclare.com/english/ for an online version of the Daily Office including today’s scripture readings.]

Today’s Readings for the Daily Office

(Book of Common Prayer, p. 966)

Psalms 16, 17 (morning) // 22 (evening)

Ruth 4:1-17

1 Timothy 5:11-22(23-25)

Luke 14:1-11

They have closed their heart to pity,

and their mouth speaks proud things,…

Deliver me, O Lord, by your hand

from those whose portion in life is this world;

Whose bellies you fill with your treasure,

who are well supplied with children

and leave their wealth to their little ones.

But at my vindication I shall see your face;

when I awake, I shall be satisfied, beholding your likeness.

Psalm 17:10, 14-16

I was talking yesterday to a CPA who is preparing a presentation for an ecumenical conference about some of the economic turbulence in the world and how it affects us. She was saying that most of her clients are relatively well off, after all they are asking her to do their taxes for her. (When she first went into business, her husband was skeptical. Why would they pay her just to fill out forms for them? Anybody could fill out their own tax forms, he said.) But her business has been good. Tax returns are not so simple for the prosperous.

She says most of the people whose tax returns she prepares complain mightily about their circumstances. They don’t have enough money. Their taxes are too high. Often they haven’t withheld enough through the year or made quarterly payments. They are strained on April 15. Some are living beyond their means.

Sometimes this CPA takes it upon herself to tell them where they are financially compared with other Americans. She shows them where their income fits in comparison to the rest of our neighbors. She says that they almost always have underestimated their place in the American economy. They imagine themselves in the middle quintile when they are actually in the top. Many of her clients don’t recognize their privileged place in the American economy.

Very few families with modest income can take advantage of the privileged low tax rates for capital gains. More than 60 percent of capital gains income is filed by the top 0.1% — the ultra-wealthy. Incomes below $50,000 claim 6 percent from capital gains.

My wife and I are both salaried people working for non-profits, and we know we are wealthy. We are on a relatively high rung on the economic ladder. And yet, we pay a higher proportion of our income in taxes than multi-millionaires. Because Arkansas’ taxes are primarily regressive taxes like sales tax rather than progressive taxes like income tax, the poorest in our state pay double the proportion of their income than do the richest. And our lawmakers just lowered the income tax rate, making that circumstance even more unfair.

Part of the problem when we make budgets and create tax policies is that the wealthy don’t relate to the poor. Many relatively wealthy people think they are economically strained.

The very wealthy have powerful lobbies to promote their interests. They make large contributions to politicians and have access and influence. Most politicians in Congress are wealthy; few come from working-class backgrounds. Many have been well supplied from childhood. Like my CPA’s friend’s clients, they don’t know in their bones what a struggle the middle class and poor encounter.

When I look at the budgets proposed by Paul Ryan and passed by House Republicans my jaw drops. They seem to have no recognition of the concentration of wealth in this country. They seem to “have closed their heart to pity” as they cut programs that are lifelines to the poor.

Deliver us, O Lord, by your hand from those whose portion of life is this world; whose bellies are filled with treasure, but who fail to see the struggle of their neighbor.

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