From the Wall Street Journal:
“This all-too-conveniently confuses the incidence of a tax with the burden of a tax. The marginal tax rate on every additional dollar of capital gains and dividend income from corporate profits can reach as high as 44.75% at the federal level (assuming a company pays the 35% top corporate rate), not 15%.
The Congressional Budget Office recently examined the distribution of federal taxes on various income groups. The report was ballyhooed by liberals as proof of rising income inequality, but that argument is for another day. What everyone has ignored is what CBO found about the relative taxes paid by different groups. And, lo, the rich pay more, which is probably why the press didn’t report it.”
Indeed” “why the press didn’t report it.” All we have heard from the Left is the inequality, a la Warren Buffet, is the inequality of who pays what for taxes. What they seldom report to the public, and what Warren Buffet absolutely doesn’t mention, is exactly the important info laid out above: double taxation. The money that Buffet receives has already been taxed once at the corporate rate (35% before legal deductions) and as an owner of the corporation (as that’s what shareholders are – owners) he gets taxed a second time on that income – referred to as dividends.
Make no mistake – I am not a Romney support; I did vote for Newt here in the NH Primary. However I do believe that Mittens, for all of the well deserved opprobrium thrown his way for his numerous flip flops on issues near and dear to conservatives (and for the NH Establishment backing him), should not be coming under attack for the success he has earned as being a capitalist. Yes, the Schumpeter “Creative Destruction” of how capitalism shifts resources, both financial and human, from inefficient areas of our economy to more efficient ones can be painful. I certainly ran into this as the Route 128 mini-computer marketplace (e.g., the Wang Labs, Honeywell, Digital Equipment, Data General, Prime, et al) collapsed from the onslaught of first the “workstation” companies and then the Personal Computer tsunami. My family suffered and my career suffered – and I and my family had to retool skill-wise and lifestyle-wise.
But again – why is not the Press precisely and clearly outlining this double taxation? As Newt says – it doesn’t fit the narrative:
“…They weren’t interested, because they would like to attack any Republican. They’re attacking the governor, they’re attacking me. I’m sure they’ll probably get around to Senator Santorum and Congressman Paul. I am tired of the elite media protecting Barack Obama by attacking Republicans.” (Cheers, applause.)
Given that Obama is planning on using the Occupy Wall Street collectivist / Marxist rhetoric and attack “the 1%” mixed in with the “Buffet scenario” to run on, it becomes clear why the Press clearly doesn’t step in and correct the mistake.