Tuesday, Aug. 30, 2011 | 2 a.m.
Warren Buffett says he pays a lower tax rate than his secretary, and that “coddled” rich people should pay more in taxes. His politics are showing (Buffett is a Democrat). In actuality, he pays a much higher tax rate than his secretary.
Dividends and capital gains are taxed twice: 35 percent when a corporation earns the money and 15 percent when it’s paid out to shareholders. As the owners of the corporation, shareholders pay both taxes for a combined rate of 45 percent. If you think shareholders and corporations are different entities, imagine how shareholder returns would be affected if corporations paid no income taxes.
Democrats say they want to stimulate the economy, create jobs and reduce the outsourcing of jobs overseas. Eliminating the corporate income tax would do all three. The increase in economic growth and American jobs would generate tax revenues that would offset the elimination of the corporate income tax. The tax rates on dividends and capital gains could be raised, so that shareholders bear their share of the offsetting tax revenues. A flatter, broader tax would be best.
Democrats’ animosity toward rich people is counterproductive to their stated goals. Class warfare against the people who invest in businesses and create jobs is not the way to grow an economy and lower unemployment. Allowing them to earn a better return is.
If Warren Buffett thinks rich people should pay more, he should leave his fortune to the government instead of the Bill and Melinda Gates Foundation. Or write a check.