[arista]

When you make your money from capital gains and dividends, yes you are paying a rate of 15% . Yes, this is lower than the income plus payroll tax rate for people earning $50,000+. However, you have to keep in mind that earnings from capital gains and dividends only come from AFTER-TAX corporate profits. Corporations are subject to the 35% tax. What’s left over belongs to the shareholders who then have to pay 15% on whatever they get. So Buffet’s effective tax rate is really more like 45% because those earnings are being taxed twice.

On the other hand, normal wages are paid out of PRE-TAX corporate profits, so those earnings are only taxed once.

This point needs to get out there more often.

[jmax]

As a democrat political operative personally involved in the obama campaign, I think the FEC should require her to reveal a copy of her income taxes.

s/off

[LauraJean]

That’s how my husband, a CPA explained it to me.

[muawiyah]

Let’s use some common sense here. If Buffett wanted to he could pay her in STOCK. She could sell that and pay 15% on the proceeds.

[muawiyah]

Here's the same point ~ when you earn wages they deduct FICA but you get no tax advantage from that. You must pay FICA and also pay income taxes on FICA.

Until someone gives a "darned" about double taxation of personal income probably no one will give a "darned" about taxing corporate income ALSO as individual income when distributed to individuals.

Double taxation by the federal government is a well established principle ~ why should folks who get paid from dividends get away with avoiding it?