photograph by Susanne Neal | Dreamstime
The conventions are over and the 2012 presidential campaign, thankfully, is in the final weeks.
The Democratic and Republican national conventions in Charlotte and Tampa resembled the Memphis in May barbecue contest in one respect: people watching other people party. The difference is that the food fest has a serious purpose. When reporters and bloggers outnumber convention delegates three to one, it’s time to shut the whole suspenseless, over-scripted thing down.
Some national pundits say that the outcome of the election could be determined by grumpy middle-aged men, so I tried to pay attention to the convention coverage. But when I did, I concluded that Barack Obama and Mitt Romney are talking over my heads about taxes and finance.
I know that my wife, a self-employed painter, and I are in the broadly defined middle class. Our taxable income varies from year to year. We own stocks and have retirement accounts. I am eligible to apply for Social Security and to take IRA deductions but am not old enough for Medicare coverage. That much I get, some of it better than others.
For all the talk about tax rates and lowering or increasing them, I don’t know my tax bracket. I know, however, that doing my own takes me the better part of a week’s worth of evenings, after which I begrudge the time more than the bill. The envelope I finally send to the IRS usually contains at least ten pages. Sometimes I get a notice that I underpaid and owe additional taxes and a small penalty. And sometimes I get a notice that I overpaid and a refund is coming my way. It evens out.
But whether our taxable income from salary, freelance work, self-employed income, dividends and capital gains, IRA distributions, and some land we own in Mississippi is taxed at a rate of 15, 20, 25 or 28 percent I could not say. I add ’em all up, consult the tax tables, and write a check.
This is not exceptional. Owning stocks and other investments is essential to anyone facing retirement and not covered by an old-fashioned defined benefit plan. And self-employment and second jobs are a part of life for families that took a hit in the real estate and stock market crash of 2008 or lost their jobs or had their salaries and benefits reduced.
Both presidential candidates say they want to help working people and the middle class, but they’re not speaking my language.
The tax rate is not only the federal income tax rate, it’s the combined federal, state, and local tax rate including sales taxes and property taxes. Tennessee, with no broad-based state income tax, is a low-tax state.
I know the sales tax in Memphis is 9.25 percent, and I know my Memphis and Shelby County property taxes to the dollar but not my federal taxes due to the impact of deductions and credits.
And although health insurance is our biggest annual expense, we get no "health dividend" for being nonsmokers, physically fit, and fortunate enough to rarely have to use it.
I know the stock market has nearly doubled since four years ago, but I don’t hear either candidate talking much about that, possibly because things could go the other way in the next four years. And if you are in bonds or money market or cash you missed the rally.
I know Social Security and Medicare eat up 10.4 percent of my wages, but I had to ask our company accountant to explain how this is temporary and could go to 12.4 percent next year. Whether I take Social Security when I am 66 to get “full benefits” or sooner and get a few thousand dollars less, the amount won’t begin to cover our retirement needs.
And although health insurance is our biggest annual expense, we get no “health dividend” for being nonsmokers, physically fit, and fortunate enough to rarely have to use it.
I hear the candidates talk about “the crushing burden of college debt” but don’t understand the whining. You borrow a lot of money to go to college, you pay it back. There are cheaper options, trade schools, and lottery scholarships for those who stay in Tennessee.
The crushing burden of mortgage debt? With sympathy to those who were defrauded, if instead you overspent on a house and can’t pay off a loan at 3.55 percent, the lowest interest rate in over 50 years, maybe it’s partly your own fault.
Insensitive? Maybe so. But my favorite author, mystery writer Loren Estleman, reached me in a way Obama and Romney never will in his new book when his fictional detective replied this way to a former journalist complaining about the sad state of the newspaper business.
“I know. I had to let the parakeet go.”