The Obama Buffet Tax Scam

Last night, President Obama dragged out a few lines of rhetoric that frankly are wearing quite thin.  He uses them because they are effective.  And they are effective because the average American is more concerned about who will win America’s Got Talent than they are about understanding our economy and the tax code.

“Right now, Warren Buffet pays a lower tax rate than his secretary – an outrage he has asked us to fix.  We need a tax code where everyone gets a fair shake, and everybody pays their fair share.”

It is true that Buffet does pay a lower rate than his secretary if his entire income is factored.  The problem, and what he and Barack hope you don’t figure out, is that the reason for this is the marjority of Buffet’s earnings in a year come from capital gains, which are taxed at a lower rate than regular earned income.  If we only took his earned income and compared his tax rate to that of his secretary, his tax rate is about double that of his secretary.  But that wouldn’t move the commie agenda forward, now would it?

So, since the regular income tax rate is already progressive, what is the solution?  Is it to tax capital gains at an even higher rate?  Would it be to tax all income at a single rate?  They won’t say.  I’m sure this is because they would be eaten alive by any reasonable economist.  Raise the cap gains rate and you will see investment in the US economy move elsewhere.  Buffet knows this.  I’m not sure why he insists on his tired tax mantra.