Differences between the tax rate on earned income and the rate on income generated from capital gains has lent some success to President Obama’s envy-the-rich campaign. It has given Democrats the edge in demagoguery by implying that billionaires like Warren Buffett are taxed less than their secretaries. Never mind that Buffett’s total tax in actual dollars is likely several thousand times as great as his secretary’s.
As a sound bite, this inequity does sound unfair. But there are valid reasons for this difference in taxation rate, and they are connected to job creation. Taxing capital investment at lower rates encourages savings and investment, the lifeblood of economic growth and full employment. In addition, it keeps the wealthy investing instead of seeking tax shelters for their income and savings.
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Yes, the investor class always has a good reason about why they should receive preferences. You have the lower capital gains rates. You have become engorged on a dramatically disproportionate share of American wealth (Have you checked out the stats recently?). You have been coddled. You are the favorite child. You always get seconds at the table. If there is a class war going on, it is being waged against the vast majority of our people who have not seen their income rise for well over a decade. How much do you guys want anyway? Anyway, here is my question: So where are the jobs? You are the job creators, right? You are getting what you want, so where are they? Let me suggest the real job creators are ordinary folks with money in their pockets who want to buy and who can create the effective consumer demand that gives you incentive to create a business and a market. Disagree? If so, please create the jobs, as you have been getting those sweet tax rates and breaks for a while now!
LocalObserver - why are you so envious and jealous? Have "rich people" negatively impacted your quality of life, or is it simply that you haven't attained wealth and believe that others have something you think belongs to you? If there is class warfare, then you have only your man Obama to blame.
"You have become engorged on a dramatically disproportionate share of American wealth "
I guess you do not understand that there is not a pot of wealth somewhere that rich people are digging into. In fact, there is no wealth unless people create it. You seem angry that the people who create the wealth that benefits everyone get to keep some. Would you rather have it given to those who do NOT go to school, work hard, develop disciplined habits, save and invest money, and then take risks to create or invest in businesses that employ people? You know what would happen if we redistributed wealth to the lazy? They would squander it, and the successful would give up making money so it could be taken away. Remember communism?
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Warren Buffet agrees that there is class warfare...and that his class is winning.
There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” To hear Ronald Reagan's take on some of this...http://www.youtube.com/watch?v=cgbJ-Fs1ikA&feature=player_embeddedMore nahantjim!
It is such a tired argument that these people are the "job creators". They have enjoyed huge tax breaks for the last 40 years. The tax rate for the super rich was much higher in the past. Beginning with St. Reagan, they started seeing more of their money, and the middle class started seeing less. Their living expenses take up a much higher percentage of their"wealth" than the rich. They don't want your dirty money, they just want the rich to start paying their share. Check out corporate profits, they haven't been hurting, Wall St. isn't hurting. The people at the top aren't hurting. They are keeping more of their money than they ever have. If they were going to create jobs, they would have done it by now. The theory doesn't make sense, and the rich are proving it. Their greed has taken over.
There is no class warfare. It only exists as a tactical discussion point on entertainment news programs presented by Fox News and token conservatives on mainstream TV network news. President Obama is only asking to eliminate the Bush tax cuts which placed us in debt along with the two wars we fight and pay for with "credit cards". Obama has ended one war and has set a date to end the other. It's time to end the tax cut.
Warren Buffet and his wealthy colleagues agree that they should pay more in taxes. It's people like the wealthy Koch brothers, "Clearpoint" and others who threaten their employees if they vote for Obama, who want to cut taxes even further. These people are responsible for the fear mongering billboards recently placed in black communities.
your comment is right, and remember Warren Buffet pays millions in taxes each year. Many retired folks depend on their savings and interest earned to help them and to tax at what little they get at a higher rate would be devastating to them. Also, remember the rich spend which creates jobs....and give millions to charities.
trickle down?
President Obama's claim is also factually inaccurate. Mitt Romney's AVERAGE tax rate is around 14% - that's true. But the average Middle Class family's AVERAGE tax rate is even lower - below 10% by most calculations. It's the MARGINAL tax rates that are different between earned and investment incomes. But the tax code is so heavily weighted in favor of lower incomes that someone has to earn more than $100,000 per year before they start paying more than a 14% AVERAGE tax rate. Obama's counting on most people not knowing enough about money and taxes to understand the difference. And, based on most of these comments - including from supposedly knowledgable reporters, it looks like he's succeeding.
OK, so of the arguement in favor of a lower tax rate for the investor who "risked" his money, then ought not a firefighter pay even lower taxes? After all, he's risking his life!