Tax Rates Paid By The Wealthy Have Fallen Sharply
The current tax code is intrinsically unfair to the majority of Americans—the W-2 crowd—who work for a living and earn little money from capital gains or dividends. Nearly half of Americans own no stocks, for example. The Buffett Rule would only modestly reduce these inequities. Meanwhile, another element of President Obama’s 2013 budget plan—raising capital gains tax rate to 20 percent for high earners—also doesn’t go far enough since this rate would be about half that of the top income tax bracket. A fairer approach would be to tax all income from capital gains and dividends as ordinary income, with limited exemptions. This step would raise $1 trillion over the next decade, with most of that money being paid by affluent households.