[quote=pri_dk]One of the arguments for lower capital gains and dividend tax rates is that corporate profits are taxed twice. The corporation pays taxes first and then the shareholder is taxed again. So the total taxes paid on corporate profits is generally around 50%.[/quote]
Perhaps you can make this argument for dividends. When you are making a capital gain, you are not paying taxes again on the taxed money of the company. Capital Gains tax is NOT double taxation. Lot of times people make this argument. It is important that we are clear about this distinction between dividends and capital gains.
The only reasonable argument for taxing capital gains at lower rate than wages is that someone put his money at risk and low capital gains taxes would encourage risk taking.
Even if we agree on that, there is no justification for 15% tax on carried interest that Romney receives because he did not put his own capital at risk to receive it. Lot of people at investment banks do exactly the same thing that Romney did; and pay much higher income tax on their earnings because their earnings are not “carried interest”. I am frankly astounded how so few people get outraged by this basically completely unfair tax break that private equity receives.
Moving further, I still do not hear any rational argument about why a person earning 175,000 needs to pay “Alternative Minimum Tax (AMT)” but people like Romney are somehow exempt from it.
If you have any sensible argument, please let’s hear it.
It not question about low tax/high tax. It’s a question of fairness!
