For months, Democrats have stood with President Barack Obama in calling for increasing “taxes on the rich” based on billionaire Warren Buffett’s claim that he pays less in taxes than his secretary.
Mr. Buffett now concedes that the rule carrying his name actually does little to reform a broken tax system and increase revenue.
According to the White House, there are 22,000 households whose earnings exceed $1 million. Note the difference between earnings and income in the tax code.
Earnings on investments are taxed at the capital gains tax rate of 15 percent. Income from wages and a salary is taxed at the tiered rates applied by the U.S. tax system that range up to 35 percent.
Warren Buffett’s massive wealth results from investments, stock holdings and a $100,000 salary from Berkshire Hathaway. This is critical; the comparison of two different rates cannot be made with intellectual honesty.