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Examiner
  • Ron Finke: All should work, all should pay

  • Raised by Depression-era parents, I come by my habit of saving things rather naturally. Some of you also were trained to put rubber bands in a special drawer because you might need them. Thus it is also natural that I have most, if not all, of my tax returns back to my first year of filing. It is not just history – it is my history.

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  • Raised by Depression-era parents, I come by my habit of saving things rather naturally. Some of you also were trained to put rubber bands in a special drawer because you might need them. Thus it is also natural that I have most, if not all, of my tax returns back to my first year of filing. It is not just history – it is my history.
    I began mowing lawns as a self-employed person at about 13. I realize now that I should have paid Social Security tax on the few hundred dollars a year I earned. The statute of limitations has thankfully run on my transgression.
    One of my patrons was the secretary of the building management company for the Medical Plaza Building across from St. Luke’s Hospital in Kansas City. She got me hired at age 15 as the groundskeeper for the building. I believe I made $2 an hour, a little more than minimum wage. It seemed I had more money than I have ever had since!
    So in early 1970, I filed my first return for 1969, declaring $973 in income and $24 of interest on about $600 in the bank. I got a refund of $83, but my tax was $12 to the federal government. It was only a hair over 1 percent, but I felt like I was making a contribution to the welfare of the country.
    After investing almost $15,000 in college education at Mizzou and Stanford, Karen and I married in May 1974 and began law school in August. That year we earned together $10,150, working for Stone Manufacturing in Kansas City, Retail Clerks Union Pension and Welfare Fund, and Scarritt College in Nashville. We paid $1,214 of federal tax or just under 12 percent.
    Four years later, after investing another $14,000 or so for my law school degree from Vanderbilt, Karen and I together earned almost $14,000 in 1978. We recall that I started as a lawyer, earning less than beginning teachers in the Independence School District. But of course, everyone knows lawyers make a lot of money! Our federal tax was $1,216 or 8.77 percent of our income. It may have dropped because we now had Greg and another personal exemption.
    Twenty years later and following a lot of inflation, we paid a hair under 10 percent in federal tax. After another 10 years, in 2008 we paid a little more than 14 percent of our adjusted gross income in federal income tax. Last year I think it was a little more than 15 percent. But that is so recent I am not sure which electronic file holds my return!
    Nice story, Ron – what’s the point?
    I have paid federal income tax every year since I was 15. I have had a great career and I expected to be successful and always pay income tax. I feel good about being able to do it.
    But recently, not only do 47 or more percent of our population not pay any federal income tax, but millions of people, even college and graduate students now receive money from the taxpayers as earned income credits. Some of these same people complain about how bad they have it. They don’t even have any skin in the game!
    Page 2 of 2 - In my opinion, I have a duty not only to support my family if I can, but I owe a duty to support my various governments in their legitimate exercise of power and provision of necessary services for the public good. I also believe every able-bodied person old enough to work owes it to himself and the rest of us to take a job, even if he doesn’t like it, and pay some income tax, even if only 1 or 2 percent. We’ll all feel better about it.
    Ron Finke is president of Stewardship Capital, a registered investment adviser. This is general advice and not meant to contain specific recommendations. Reach Finke at rcfinke@stewcap.com.
     
     

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