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The Democrats have been claiming that rich people get a lower tax rate.
This is a Big Fat Lie.
All Americans are subject to the exact same tax code.
The “lower than his secretary’s” tax rate that Buffett pays is on his long-term capital gains income. His famous secretary’s “higher tax rate” is on her regular income.
If Buffett earned any regular income, he’d pay the rate that’s on the same chart his secretary’s salary is taxed on. And if his six-figure, two-luxury-home-owning secretary sold one of those houses at a profit, she’d pay capital gains tax at the same rate that Buffett pays.
There are many good reasons for capital gains to be taxed at a lower rate. For example, it encourages people to invest in business and property.
The Democrats claim that their proposed “Buffett Rule” increase on the capital gains tax rate would increase revenues to the government and help with the national debt. But it is just as likely to further depress the economy, leading to even fewer jobs and less tax revenue.
Since big economic issues are much too hard for us dumb homemakers to understand, here’s another, simpler reason the Buffett Rule is a crappy idea.
Let’s imagine that your elderly parents have retired and are slowing down. They need to move to a smaller, less expensive home, so they decide it’s time to sell the house you grew up in.
They spent 30+ years caring for and paying off the mortgage on that house. It’s the biggest asset they have. Besides allowing them to move to a smaller place, its sale will help finance their final years on earth.
Over the years they were earning and putting money into the house, their income was taxed at the regular income tax rate. When they sell, the government will graciously allow them to have that amount of money tax-free. Generous of them, isn’t it? Seeing as it was their money all along, just tied up in the house.
But what about any money they make on the sale price that exceeds the amount they paid for and put into fixing the house? THAT money the government counts as long-term capital gains income. And Uncle Sam wants his pound of flesh for it.
This is the allegedly unfair lower tax rate that the Buffet Rule proposes to increase so it will match the higher tax rate on regular income. Democrats are saying this is more “fair.” But what is fair about politicians taking a ginormous bite out of an elderly couple’s retirement money?
The Left talks about people who have assets as if they are all dirty scoundrels who deserve to be punished. But what’s evil about owning and caring for a home? SOMEbody has to own it. Would it have been better if your folks rented all those years, then when they retired, they’d have NO assets to see them through their golden years? Sheesh.
And … by the way, Occupiers … a whole bunch of these exact same self-righteous Democrats are themselves millionaires.
One of them, Barack Obama, just tucked a whole bunch of his moolah into trust funds for his kids where the IRS can’t get at it.
“How unpatriotic!” the Left would say, if it were Mitt Romney or some other Republican. But, seeing as it’s a Democrat, “He’s just doing what’s best for his family.”
Obama’s been running around ranting about how “unfair” it is that long-term capital gains are taxed at a lower rate than regular income when he himself has no capital gains income. Meanwhile, he is NOT running around ranting about how “unfair” it is that millionaires like him are allowed to shelter great wads of their (allegedly ill-gotten) gains in trust funds for their kids!
What flaming hypocrites these people are! Personally, I have no problem with trust funds or lower capital gains tax rates. What bothers me is hypocrisy. And these people are the worst!
The Left’s “War on the Rich” is just another inning in the same ol’ same ol’ political game they have always played, pitting one group of Americans against another group of Americans in order to get votes and advance their own careers, their own power and their own Big Fat Bank Accounts.