It’s actually relatively simple. Those who have large accumulated wealth, already, don’t receive the bulk of their income as “earned income” which is subject to the highest tax rates (39% under the coming rates), but rather earn their income as “passive” invested income. Tax free municipal bonds, capital gains on stocks, income from investments in foreign countries. During John Kerry’s campaign for President, it was revealed that he and his wealthy wife (who got her wealth from her dead husband) paid an effective tax rate of only 15%. And that was before one considered her hidden income from foreign investments. People who are working hard and building a business, or trying to accumulate wealth, pay the higher tax rates because their income is “earned income”. That’s why its easy to be rich and a liberal. Higher tax rates on earned income don’t apply to you. Most of your income is passive and subject to no tax at all, or lower tax rates. Don’t look for ABCCBSNBCCNNMSNBCPBS to explain this to you. They depend on their funding from the people who don’t pay the higher rates.
all good points abut “the rich” living off “unearned income” from their investments, such as dividends
Buffet I believe has set himself up to be paid in dividends, and takes only a token salary - to reduce his income taxes. The Kennedys live off family trusts established to manage their inherited wealth and reduce their taxes. John Edwards established a sub-chapter S corporation to shelter his wealth, and Rahm Emmanuel establishd his family as a nnprofit and the family home as its headquarters so he and wife (the only “emploees”) could write off expenses and shelter wealth
With the right tax lawyers, a lot of people could become “richer”. Paying “income” taxes is for little people
However before conservatives join the pack of baying hounds determined to run down “the rich” who live off “passive” investments, remember that many retired folks who managed to save and invest over a lifetime, putting momey aside onlu after it was already taxed, also depend on investment income when they are no longer able to work. They will also be hunted down as “rich” under any govt laws aggressively targeting investment income