Oh, I don’t forget it, but many things are double taxed. Your salary income is taxed at the state, federal and sometimes city level. Then you pay a sales tax on what you have left everytime you purchase something. If you save that money or invest it, you’re taxed on the capital gains, and when you die, your descendants pay a death tax on what remains. The same income is taxed multiple times. I understand the reason for keeping the taxes on investment capital low, but we’ll never be able to keep up with the government’s revenue demands...the only way is to kill the spending beast and reduce the rates for everyone - including salary earners.
“Your salary income is taxed at the state, federal and sometimes city level. Then you pay a sales tax on what you have left everytime you purchase something”
Those are state issues, and bringing them in muddies the argument as much as Buffet’s comparing the apples and oranges of income and capital gains taxes.
“If you save that money or invest it, you’re taxed on the capital gains, and when you die, your descendants pay a death tax on what remains.”
That’s true, and I should point out that the corporate tax in particular—nevermind for now the death tax—affects people who aren’t paid mostly in dividends and capital gains, too. The less profit a corporation makes, all things being equal, the less people they employ. Also, the less profit they make, the less money 99% put in their 401K or invest on their own.
It just so happens that the corporate tax affects people like Romney and Buffet more directly, since that’s how they take their income. For Buffet to compare himself to his secretary—again, forgetting that his secretary is paid more than basically any other secretary on Earth—he should add the coporate tax rate to the capital gains and whatever other applicable rates and compare that to the income tax rate. Not to is dishonest.
“I understand the reason for keeping the taxes on investment capital low”
I do, too. I only wish in all these conversations about the balance between savings and consumption, the supply and demand of investment, and the best tradeoff between marginal rate and GDP growth, the VAT tax would come up more often. No matter where you pinpoint capital gains rates, the government gobbles it profit before it ever gets to Buffet/Romney’s pockets. And that’s not just the way it is, that’s by design. The feds are only willing to toy with the marginal rates because they know there’s plenty other ways, less noticable ways, to get the goose’s eggs.
“the only way is to kill the spending beast and reduce the rates for everyone - including salary earners.”
The only ultimate way, yes. Which is not to say that some forms of taxation are better than others. But as a prominent economist once said, what matters most is how much we’re taxed, not how we’re taxed. And how much we’re taxed is a function of how much we spend.