Low Capital Gains Tax Rate Leads to Loss

fcnp.com — Once again, the question Warren Buffett first asked this past summer is being raised: Why do the super wealthy in this country pay less in taxes than the working class? How do people making millions of dollars a year pay roughly 15 percent in taxes, while someone with a salary of $100,000 per year will pay as much as 28 percent in taxes? This is because of the currently low capital gains tax rate. Republicans first argued that the capital gains rate needed to be lowered to 20 percent in 1981, as part of what former President George H. W. Bush called "voodoo economics." Republicans assumed if the wealthy paid less money in capital gains taxes, they would take that extra money and create jobs by building factories and opening businesses, family farms would flourish, and the number of construction projects would grow — they used these wholesome images to justify bad policy.

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