Vail Daily letter: In response …
May 30, 2011
In response to Fredric Butler’s letter of May 23: “I’m right”: Well, you’re not right. You are wrong.
It is sad that Fredric Butler is so predictable. His letters might be a hair more interesting if he was not. In a prior letter I wrote in response to Butler’s original letter of April 26, I made the following observation: “Butler also has a bad habit of ignoring what he says in his original letters when he responds to any contradictory letter pointing out any of his errors. He should re-read his letters before filing a response to another person’s comments.”
This observation holds true with respect his latest letter to which I am responding, as well as his response to Mr. Murawka’s letter. His replies are merely personal attacks containing no real substantive arguments. No supporting verifiable facts or law have been offered which contradict my prior letters nor Mr. Murawka’s letter, nor has he cited any legitimate credible source which disproves either of our claims.
In this letter, I will reply directly to some of Butler’s unsupported claims, distortions, attacks, inaccuracies and falsehoods.
Butler accuses me of advancing a “neo-con agenda (aka, “living Constitution spin).” Obviously he has no idea whatsoever of what a neo-con is or anything about their agenda. Neo-con stands for “neo-conservative.” In the ’70s this movement opposed the welfare state and government regulation of the economy. Its thinking was more in line with the libertarian-Republican-leaning ideas advanced by the Chicago School of Economics. Milton Friedman was its contemporary guru. In the ’90s, Neo-conservatism turned almost exclusively to foreign policy issues and played a major role in the Bush II administration actions and his two wars of choice. Its agenda had and has nothing whatsoever to do with the concept of a “living Constitution.”
If Butler bother to re-read my two responses to his April 26 letter, he should clearly see that I did not argue any political position whatsoever (left, center or right) with respect to the health care act.
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I only commented on Butler’s inaccuracies and distortions and his failure to include applicable facts and statutes necessary to provide complete information to the reader. Further, I made no reference or mention whatsoever of the Constitution, let alone the concept of a “living Constitution.” Where this nonsense came from is beyond my comprehension.
tion.” Where this nonsense came from is beyond my comprehension.
In hisMay 23 letter, Butler states the following: “Bornstein does not deny that there is a 3.8 percent tax (this is correct) that is hidden in the bowels of the bill, yet he overlooks and intentionally or disingenuously evades the fact that it was hidden in the first place in this unread and voluminous tome that his president foisted upon the American people under the disguise of ‘health care.'”
This is incorrect! Butler makes this claim in all of his responses on this issue in one form or another, for example: “What was stated was there is a hidden 3.8 percent surcharge tax in the health care bill on the transfer of real estate when Obama declared there would not be.”
Of course I acknowledge the existence of a 3.8 percent tax. Unlike Butler’s letters, I included the statutory citation, as well as an accurate explanation of its applicability. As I said in my first response, this is a false claim in that the 3.8 percent tax is not a part of the health reform act, as Butler claims, and nothing was hidden. Further, Obama made no such declaration as to this specific tax. It appears that to Butler’s way of thinking, anything in the IRC as well as anything in any bill signed by Obama which Butler dislikes or disagrees with is “hidden,” just as his false claim that the (non-existent) exemption for Muslims from the mandatory insurance provision was also hidden.
I also expressly cited the IRC Section which provides for a $500,000 exemption (for joint filers) on any gain on the sale of a primary residence which provisions were either not known or understood by Butler or more likely were intentionally ignored.
Had Butler accurately included this information, it would have negated his sham claims. So, to clear up any doubt:
Public Law 111-152 [H.R. 4872] Mar 30,2010. Health Care and Education Reconciliation Act of 2010
The following new chapter was added to Section 1402: “Chapter 2A-Unearned Income Medicare Contribution.”
Sec. 1411 Imposition of Tax.
(a)(1) “Application to individuals.-In the case of an individual, there is hereby imposed… for each taxable year a tax equal to 3.8 percent of the lesser of (A) net investment income for such taxable year, or…”
These quotes are just a small portion of the act. The tax also applies to other situations.
Subsection(c)(1)(A)(iii) states that this tax applies to the: “net gain … attributable to the disposition of property other than property held in a trade or not described in paragraph (2),” This is the only time the word “property” is used in Sec. 1411. This “property” does not distinguish between residential and commercial property nor does it distinguish between land, buildings, stamp collections, jewelry or any other real or personal property.
Despite Butler’s claims to the contrary and depending on the circumstances, this tax can apply to an estate, a trade or business, as well as residential and commercial property. The test is whether the income level meets the threshold and whether the income is passive income, as defined in the act.
Mr. Butler, please note that there is no mention of the health reform act in this section (1411) of this act. This tax is a Medicare contribution — it is a tax on certain unearned, passive income/net investment income for those people filing a joint tax return who meet the threshold income of $250,000.
Butler harps twice on the following statement that I made: “This Medicare tax is not a sales tax and it does not apply to all real estate transactions, as Mr. Butler has falsely led one to believe.”
He left the following two sentences out: “It is not intended to be and it is not a tax on middle income earners as Mr. Butler incorrectly alleges. This tax is aimed at the so-called ‘high earners’ and it may affect the top 2-5 percent at most.” …
First, the words “sales tax” were not in quotes and I never stated that Butler said it was a sales tax. This was simply a part of my explanation, nothing more.
Butler claims that the tax applies to everyone, including “the American middle-class … the majority of those homeowners (who) make less than $250,000 per year,” which is approximately 98 percent of the people in the U.S.
Mr. Butler continues with: “Bornstein next spins what I wrote: ‘It is not intended to be and it is not a tax on middle-income earners as Mr. Butler incorrectly alleges.’ “
If the tax applies essentially to everyone, as Butler states above, then it certainly is a tax on “the American middle class.” As I stated above, the tax will only apply to 2-5 percent of the population — those who make a profit in excess of $500,000 on the sale of their primary home and those who have passive investment income in excess of the threshold income of $250,000 — facts Butler failed to disclose.
Butler continues: “Did I say that? No! I simply said that it was a tax on the transfer of real estate. If you want to imply anything from that, it is a tax on those folks that do pay income taxes.”
I am sorry, Mr. Butler, but you did say that!
Mr. Butler also states: “In fact, Mr. Bornstein, I said that the tax did not apply to commercial-industrial real estate transactions. Did you catch that?”
I did catch that and you are wrong again. Under certain circumstances this tax can be applied to estates, commercial-industrial real estate transactions, as well as to certain trades and businesses.
My final comment. I wish to thank Mr. Butler’s analogy and reference to the well-known author whose pen name is O’Henry. His short stories were famous for their moral and-or ironic twist endings, particularly “The Gift of the Magi,” “The Ransom of Red Chief” and “The Cop and the Anthem.”