Breeze – I usually find your posts insightful and generally well thought out, but this time you’ve fallen short. To say “tax the hell” out of the that bracket is one of your more stupid comments because it lacks any of the pragmatism and logic you generally have in your posts. It’s an emotional reaction, with little or no thoughtful input. Do you have any thoughtful input on this subject?
My more thoughtful, reasoned response is that the upper income brackets are not paying their fair share of taxes. It’s my understanding that a lot of the super-rich make most of their income on capital gains. If those gains are long-term, I think the rate is something like 15%. So here you have the super-rich paying about half the rate as most of the rest of us.
If you don’t believe me, listen to Warren Buffett. He has a lower tax rate than his secretary:
Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the US branch of Apax Partners, that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.
So there you have it. Buffett has a tax rate of 17.7% (without even trying to use any loopholes), while his secretary was taxed at 30%. How is that fair?
The wages slaves are generally taxed at a reasonable progressive rate. It’s those guys that make most of their money off of capital gains that are making a killing with their low tax rate.
