Letters: Tax solutions other than the ‘Buffett rule’
Tom Campbell is right that whether wealthy people are paying their fair share is the wrong question, but he’s wrong as to what the conversation should be. The question should not be about economic recovery. That is a short-term approach to taxes. We should be asking what is fair, and what is fair is to tax income — from whatever source — the same.
Campbell suggests we tamp down the incentive to invest by raising taxes on investment income and lowering ordinary income taxes by the same amount. The money not invested would be used for consumption. In other words, if an investor believes there is money to be made, he will refuse to invest because he’ll net a smaller percentage — and he’ll buy something instead.
Perhaps Campbell should remember what Warren Buffett was doing when the tax rate on investment income was much higher.
Why not go back to the rates and structure imposed under Ronald Reagan’s landmark achievement, the Tax Reform Act of 1986? That law, which taxed capital gains and dividends at the same rates as wages, could be adopted with tax brackets adjusted to reflect the doubling of prices over
the past quarter of a century.
The net effect would be something similar to the “Buffett rule” for taxpayers earning more than $300,000, albeit with a 28% rate rather than a 30% rate, and for the rest of us, a re-imposition of effective rates similar to what existed before the Bush tax cuts.
Of course, this suggestion would never be acceptable to the modern Republican Party. Notwithstanding Republicans’ professed adoration of the Gipper, his policies on taxes would be deemed confiscatory by the modern GOP.
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