Letters to the editor: Tax cuts should end for top-tier taxpayers

I would like to offer a counterpoint to the Aug. 23 letter from Jason Hochstadt, executive vice president of Jedi Management Inc., “Geithner tax comments were off the mark,” in which he cited the Tax Foundation's analysis of Internal Revenue Service data to support the view that too few are paying too much in taxes.

I would like to offer a counterpoint to the Aug. 23 letter from Jason Hochstadt, executive vice president of Jedi Management Inc., “Geithner tax comments were off the mark,” in which he cited the Tax Foundation’s analysis of Internal Revenue Service data to support the view that too few are paying too much in taxes.

He argued that top-end tax cuts due to expire should be maintained instead.

The following statistics come from businessinsider.com:

• Eighty-three percent of all U.S. stocks are in the hands of 1% of the people.

• Sixty-one percent of respondents to a survey “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.

• Sixty-six percent of income growth between 2001 and 2007 went to the top 1% of all Americans.

• Forty-three percent of Americans have less than $10,000 saved up for retirement.

• Twenty-four percent of American workers say that they have postponed their planned retirement age in the past year.

• More than 1.4 million Americans filed for personal bankruptcy last year, a 32% increase from 2008.

• Only the top 5% of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

• In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has climbed to between 300 and 500 to 1.

• As of 2007, the bottom 80% of American households held about 7% of the liquid financial assets.

• The bottom 50% of income earners in the United States now collectively own less than 1% of the nation’s wealth.

• The top 1% of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.

Top-tier taxpayers should see their tax cuts end for the same reason that Willie Sutton robbed banks: That is where the money is.

Neil Stoloff

Managing member

SweetSpot Investments LLC

Bloomfield, Mich.

I applaud the Viewpoint Op-Ed “Why a tax deduction for financial planning fees makes sense” (Aug. 30), written by Kirk Loury, chief executive of Wealth Planning Consulting Inc., who advocated a tax deduction for financial planning services that is unencumbered by any limitations.

Although I, for one, would vote against any proposal that is so self-serving and really of dubious value, I think that it important that the deduction for gambling losses be clarified. They are allowed to be deducted up to the extent that the income is reported.

So, as an example, if you had winnings of $1,000, that number would be reported on the 1040 income side and you would be able to deduct up to $1,000 in losses on Schedule A. If you lost $2,000, you would still be limited to the amount of winnings.

For those taxpayers who don’t itemize, the gambling winnings count, and the losses aren’t deducted.

Morris Armstrong

Registered investment adviser

Armstrong Financial Strategies

Danbury, Conn.

Regarding Kirk Loury’s comparison to deducting financial planning fees as one would gambling losses, it is worth noting that gambling losses can be deducted only up to the amount won. In light of the downturn, such a deduction would seem logical, particularly up to any investment loss. But this hungry, spendthrift government is unlikely to pursue a course of action that would deny it additional income.

A wiser move may be to make financial planning courses mandatory from Grades 9 through 12, preparing our youngsters for a basis in reality prior to being thrust into their own uncertain world of finance.

Ron Antosko
Associate financial adviser
Bank of America Merrill Lynch
Corpus Christi, Texas

Corpus Christi, Texas

Bloomfield, Mich.