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Liberals vs. libertarians: Tax rates

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During the 2012 presidential election a key issue was tax rates. The focus was on Warren Buffet and his secretary. Buffet’s secretary in 2011 was in a 28% tax bracket while Buffet paid less than 15% of his income.

Liberals saw this as a huge opportunity to talk about how unfair it was that rich people would pay less in taxes than the hard working front line employees. They felt Buffet should be forced to pay more taxes.

The libertarian view is quite different. Buffet’s secretary should have lower taxes. Better yet, both should pay the same percentage.

Graduated income tax was the real issue. Liberals felt that the upper brackets need to pay higher percentages for earned income. The discussion failed to mention that Buffet has minimal earned income. He pays less in taxes because he is mainly taxed on investment income. Investment income taxes are lower and paid by a broad spectrum of individuals, particularly by those in 401K plans.

Libertarians point to state income taxes as an example. In Michigan the tax rate is the same across all wage earners once some equally applied deductions are met.

Although their names are similar their views on many issues are quite different. Liberals and libertarians may start with the same sounds but opinions differ greatly on many issues important to voters. This series is an attempt by your examiner to clarify those views.

This is part of a series of Detroit’s political views is taken by permission from the “Political Cultures” section of the educational website getmaximpact.com with locally relevant additions by your Detroit political buzz examiner.

© Max Impact, used with permission.

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