According to The Wall Street Journal, the IRS just announced tax relief for the victims of Ponzi schemes. They are being allowed to deduct 95 percent of their losses. Yet people with enormous losses due the extreme mismanagement of the economy can only write off $3,000 per year in losses. These people need to be able to write off their losses as well.

In America, the middle class always gets the short end of the stick. I do not see a lot of difference in the losses these billionaires had investing with Madoff or Sandhurst compared to us poor folk who invested in the stock market with encouragement of the government.

For the vast majority of people, other than their personal homes (most of which were well financed) they had no investments in banks or anything related to the housing meltdown. Yet they have lost 50 percent to 60 percent of their investments. Millions of Americans are in the same situation.

The $3,000 per year limitation for a tax write off of losses was developed for another time, not today. Is the government saying that we did not do enough due diligence? It sure feels like fraud to me. If the Wall Street banks felt secure making loans 30 times their worth, how were we to see the dangers? Why can’t people write off losses as these billionaires can? It’s an outrage.

The U.S. government has always said that Social Security was never meant to be the sole source of income for retired people. This is true, Social Security provides the bare minimum of security. So people were encouraged to save and invest money in IRAs and other accounts.

My parents are in their late 80s and have long lived by selling a bit of their investments each year. Now they are seriously hurting because the value of their meager “wealth” has been so seriously depleted. Millions of baby boomers are nearing retirement age, and they need the opportunity to recover from these losses in real time.

Why shouldn’t the middle class get some of the same breaks the billionaires do? I would suggest that the losses should be written off at a rate of something like 25 percent a year.

BILL HELLER
Grand Junction

This entry was posted on Thursday, March 19th, 2009 at 9:08 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.