Much ado lately about wealthy folk in our land, and whether they deserve all that money. And part of the answer to that, goes to 1) how they earned it, and 2) whether others have a claim on it, because - why? - I guess because they don't have as much money. And the word used to justify it is fairness, or fair share - that floats off O's lips like honey during his speeches recently.
O has lately been making much of the Buffett rule, the notion that a secretary of a wealthy man like Warren Buffett should not pay more in taxes. In fact, she probably does not, although neither Buffett nor his secretary have released their tax returns, to my knowledge. That wouldn't fit the narrative.
Now, Buffett's effective tax rate may be less than hers, because of laws we consciously have put in place to encourage investment. Capital gains taxes, which comprise a considerable share of Warren Buffett's annual income, are taxes on increases in the value of investments. It is in fact money that as ordinary income has already been taxed, so in paying capital gains taxes Buffett is paying taxes on the income twice, albeit at a lower rate the second time.
We put these laws in place for reasons, and then politicians like O use use them as targets when it is politically advantageous. It is the worst sort of pandering, because it assumes that you, John or Judy Q. Public, is ill-informed and gullible. That you don't pay attention. That even if you did, you wouldn't understand complicated issues like taxes or subsidies for oil exploration.
Understand this: the top 10 percent of earners pay 70 percent of the taxes in this country. O is not looking for fair; O is instead looking for equality of outcome, though he dare not say it, particularly in an election year - particularly when less than half the populace thinks he's doing a good job.
Equality of outcome allows government to re-position the contestants after the race has begun. Your imagination, drive and hard work go for nought, in the name of - again, that word - fairness.
So much of the appeal of this proposal, and doubtless more to follow, depends on how you view the rich. If you view them as having arrived at their station in life through dumb luck, then maybe you wouldn't be opposed to taking more of their money. "It is easier for a wealthy man to pass through the eye of a needle, than it is to enter the Kingdom of Heaven," is how your reasoning might go. Or the Marxist saw: "From each according to his ability, to each according to his need."
I view it differently, and some of it derives from pontoon boat rides on Belleville Lake. I've been lucky enough over the years to have had several friends who live on the lake, and once in a while during the summer we get together for a leisurely, sun- and water-filled ride around the lake, accompanied by delicious snacks and cold drinks.
As we ride, we look at the lakefront homes on the shore, many of them 20 or 30 feet above us.
The houses are large and handsome, and I've wished more than once that I had a home on the lake. In fact, one of my favorite "the one that got away stories" is the lakefront home on East Huron River Drive that I let get away.
During our sojourn, we sometimes talk about the families who live in the homes. Invariably what they do for a living comes up in the conversation, and I've never once heard, "Oh, he's fabulously wealthy, and it's all inherited. He himself is an indolent, self-serving drunken scalawag with no redeeming values."
No, what I hear is that "He's a dentist." "She owns a store in town." "He's a successful real estate agent." "He's general manager of a company. "She's a chief engineer at Ford." And so on. The talk is about people who are hard-working, who get up every day at the crack of dawn, or work well into the evening, on holidays - whatever it takes to be successful. You can rest assured they've earned their money. And good for them.
And the people with whom I ride in the boat? Same good story.
But O would confiscate a "fair" share of their earnings, and hand it to someone. People who are smart enough to have earned this money are also smart enough to shield it from the government, using the government's own rules, or to simply wind down their daily production in some manner, creating less wealth for all of us.
That, my friends, is what happens with confiscatory tax rates on the wealthy. The United States has the highest corporate tax rate in the world - 35 percent - but it's not enough. It has the third-highest capital gains tax rate in the world - before the implementation of the Buffett rule - and still it's not enough.
When is it enough? It is enough when you rise up and vote in November, deny O's underlying philosophy that the vision of our beautiful country has never worked, really, and that we must transform it into his vision. Yeah, I say - when pigs fly.
Can you explain to me how the capital gains tax is on ordinary income that has already been taxed? The times I have paid it, it was on the increased value of something I bought with ordinary income, but that increased value had never been taxed. Why should that increased value be treated differently from the interest I would have earned on it in a savings account or CD? You can make the argument that investments made for our support in old age should be favored, or that investments that produce jobs should be favored, but the "already taxed" argument is not one of them.
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