LETTER Income should be taxed at the same rate
Michael Passalacqua, the owner of Angelo’s, provided a business owner’s critique of my suggestions for tax reform in a Dec. 13 letter to the editor, which I appreciate. Thoughtful discussion of government policies is one of the foundational elements of democracy, and should make those policies stronger. But he mischaracterizes the motivation of the reforms, suggesting that asking the rich to pay more is punishing them, and that people like me “assume the words ‘CEO’ and ‘corporation’ connote evil, greed, selfishness, lust, power and some other deadly sins.”
While there are people (mostly) on the left who might think this way, they are a minority and I am not one of them. That’s not to say that there are no greedy CEOs or corporations, but the whole reason it is important to have a transparent, simple, tax code is precisely because people are not inherently evil or good, so it is important to have a system that makes it easy for good people to follow the law, and difficult for people who want to cheat. By creating a new category of income (“pass-through income”) with a lower rate, the current bill creates complexity and new opportunities to game the system.
As a business owner, Passalacqua asserts that people like him deserve a lower rate because they, unlike their employees, have vision and are willing to take risks. He also suggests that having the wealthy pay a higher share of the taxes is because people like me “rarely understand what it takes to become wealthy,” and we find it “abhorrent” that the wealthy would pay less in taxes. First, asking the wealthy to pay more is not “punishing” them for being wealthy; as he acknowledges, the wealthy are asked to pay more because they have more ability to pay. Additionally, the wealthy benefit more than anyone else from the infrastructure supported by the taxes they pay; if the government were to disappear, the wealthy would have the most to lose in the ensuing chaos.
Business owners are incredibly important to the economy, and Angelo’s certainly qualifies as a pillar of Washington’s economy. Personally, I own a “pass through” business, so I would benefit economically from the new tax bill. But there is more to life than maximizing profit; I’m sure Passalacqua has made decisions that cost him money but provide other benefits. I ran a small business, so I understand the risks and the rewards that go with that. While owners are subject to the stress of meeting payroll and sustaining their market, they get the benefits of independence and control. But while business owners are important, aren’t their employees equally important? Without employees, Angelo’s could not function.
All income should be taxed at the same rates, regardless of its source. The government should not prioritize some types of income over others because it creates complexity and unfairness. A simple, transparent tax code benefits everyone. The Republican efforts to reward owners and investors will not “trickle down” to everyone else, but reduce revenues and force people to spend more on accountants to deal with the increased complexity the new law will create.
Kent James
East Washington