Are capital gains tax rates fair?

Mitt Romney on 60 minutes the other night said he thinks it’s “fair” that he only paid 14 percent in taxes last year, which is less than most of the people reading this. His rational is that most of his income is from investments — “capital gains” that have already been taxed “at the corporate level.”

Bottom line, though, is that’s it’s income, and should be taxed as such, but thanks to low capital gains taxes, it’s not.

The idea of progressive taxation, which was embraced by both parties pre-Reagan, is that the wealthy pay a higher rate than the poor because they can afford it and because they have benefitted more from the American system that taxes support. In real terms progressive taxation is a thing of the past because the wealthy can afford accountants and lawyers who make their taxes lower (as a percentage of income) than yours and mine.

Romney’s belief in the fairness of a tax code that is not progressive in any way shouldn’t come as a surprise to anyone. The reality is that wealthy conservatives will not be happy until they’re paying the same AMOUNT as you and I, not just the same RATE.

This is the belief of hard-core conservatives: that everyone should pay an equal amount because everyone uses a relatively equal amount of services.

Not only do they want a non-progressive “flat” tax; they want a clearly regressive tax code where the rich pay a lower rate than the poor.

Thanks to deductions and loopholes and capital gains taxes, they already have it, but they’ll never stop trying to get more because they think they’ve earned it and deserve it for being “job creators.”

What’s absurd is how many poor and middle class people enable them by voting against their own economic interests.

Update: Note the comparison in the graphics, which I got from a tweet from Joe Walsh, the Democrat who is running for District 15A rep vs. Republican incumbent Sondra Erickson.

Brett Larson is the editor of the Mille Lacs Messenger.

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