If President Barack Obama wanted to be honest about the current debate over taxes, he wouldn’t repeat the lie that middle-class Americans pay more in taxes than the wealthy. The Associated Press has debunked that claim, which is being used by the president to whip up anger and class envy among his supporters. (Read) The president’s demagoguery is an admission that he cannot appeal to most voters with candor, and must instead mislead.
As anyone who bothers to spend a few minutes of research, the 15 percent capital gains rate that Warren Buffett and others who rely on investment gains income is distinct from income taxes. Those earning income at a wealthy level are taxed much higher than the poor of middle class. The 15 percent capital gains tax first must assume that said income gains are a profit. Also, the money poured into the non-retirement investment has already previously been taxed. Understanding this is important. It is embarrassing for many of the president’s supporters to go around claiming incorrectly that they pay higher taxes than wealthier Americans.
Having said this, I am not opposed to raising the top limit of capital gains taxes from 15 percent to 28 percent, which would likely be what Obama’s “Buffett rule” would accomplish for a minute percentage of wealthy Americans. The capital gains tax was at 28 percent for much of the Clinton administration and the economy did well. An argument over how much investment income should be taxed during times of recession, war and high deficits would be interesting. The president, for example, could explain what changed his mind from his position in 2009. (Link)
But the president and his acolytes would rather exploit resentment.