Friday, September 16, 2011

Rich getting richer, you... not so much

 Capital Gains Tax Rates Benefiting Wealthy Feed Growing Gap Between Rich and Poor by Steven Mufson and Jia Lynn Yang, Published: September 11

       This article published by the Washington Post is an example of how money and lobbyist have influenced public policy, specifically the tax code.  The current tax code allows for people like billionaire Warren Buffet to be taxed significantly less than the people that work for him.  These lower taxes are not lower income taxes (35%) but rather a lower capital gains tax (15%).  Capital gains is money made through investment.  The majority of money generated by the wealthy is considered capital gains.  Most Americans rely on salaries for their income, salaries that are taxed at more than double than that of capital gains.
      
       Buffet is advocating for a more fair tax system, but his position is not a popular one.  The vast majority of the mega-rich would like to lower or eliminate capital gains taxes all together.  They have enlisted economist, politicians, and the media to convince the average voter that these lower taxes are necessary in order to create jobs. All this effort has worked.  Their success is directly reflected by the lower percentage of taxes they pay on overall income.


        Republicans have a well an established platform of low/no taxes for the wealthy (or job creators as they put it). A platform not generally shared by Democrats, but with aggressive lobbying and generous campaign contributions the wealthy have drawn bi-partisan support.  This has created a void, leaving a select few in Government pushing for equality in the tax system.  So who represents the middle class/poor?  Not many, its simply more profitable to support the rich.

       This lack of representation for the average citizen is widening the gap them and the rich.  This is a classic example how money can buy influence and over representation of a minority group.

(Picture via Washingtonpost.com)

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