Airing locally on King of Prussia’s WFYL 1180 AM, Republican House Speaker John Boehner spoke with Laura Ingraham regarding President Obama’s call for raising the capital gains tax on wealthy individuals like Warren Buffett and presidential hopeful Mitt Romney.
The move highlights an ongoing debate regarding how the country should tax income earned on investments in everything from new paper businesses to internet startups like the Examiner itself.
“Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.” Obama claimed at his presidential State of the Union address this Monday.
The president elaborated further by expounding on comments made by successful investor Warren Buffett concerning “fairness” in the tax code.
“Tax reform should follow the Buffett Rule: If you make more than $1 million a year, you should not pay less than 30%.” Obama maintained.
The issue of “fairness” also surfaced in the GOP primary when the January 23rd release of former Massachusetts Governor Mitt Romney’s tax returns showed he paid an effective tax rate of 13.9% in 2010 – primarily a result of most of the presidential candidate’s earnings falling under the country’s capital gains tax rate of 15% — as he is wealthy enough to live off of his own investments rather than a salaried position.
Boehner with Ingraham
Speaking with conservative radio host Laura Ingraham, House Speaker John Boehner pushed back against Obama’s insistence on doubling tax rates on investment earnings but signaled his willingness to streamline existing rates and deductions.
“We’re not going to raise taxes but we can generate additional revenue if we bring our tax code into a more competitive state, flatter: fairer. It will create more economic growth, it will be more efficient.” Boehner stated.
Fairness
Barack Obama suggests it would be fairer if millionaires paid a capital gains tax of 30% rather than 15% on the money they make on their investments in America.
However, a capital gains tax hike on investors doesn’t necessarily make society more virtuous because it’s not fair to the people in whom the wealthy suddenly do not invest.
Billionaires are already rich and powerful but the people, products, and ideas they invest in are not.
A higher tax on capital gains leaves small people that have big ideas with no path to prosperity. The super-wealthy don’t need that path – they’re already rich – why is making it harder for others to be the same more fair?
There’s a good reason to treat taxes on investments differently from taxes on salaries. Money from wages lets people buy new things, money from investments lets people build new things.
Examiner.com
At some point in the past a person in San Francisco had an idea: the Examiner, a hyper-local news aggregator that morphed into a national network of local news websites that is now ‘the inside source for everything local’ and boasts over 55,000 contributors.
That idea needed money to work; hence all Examiners are employees of Denver-based Clarity Media Group whose primary investor is billionaire businessman Philip Anschutz.
Writers for organizations like the Philadelphia Inquirer or the New York Times don’t need to concern themselves with whether or not the wealthy will invest in them to make their company bigger and better because they’ve already climbed to the top of the ladder.
Contributors to less prominent publications like the Examiner will not come out ahead if Philip Anschutz pays a 30% tax rate instead of 15% on his investments because it leaves him with less money to invest in this website’s Examiners.
Corporations may not be people, but that doesn’t mean groups of people are not corporations. And, a much higher rate at which the wealthy pay capital gains is a matter of fairness: it’s not fair for little people that want to be big.
Philadelphia Examiner
Now the City of Brotherly Love is able to receive updates on the science fiction TV series Fringe from Brian Thomer, the Philadelphia Comic Book Examiner. They can also help prepare for an interview with Caroline Leopold, the Philadelphia Writing Careers Examiner, or even brush up on the Philadelphia Orchestra with Adam Taxin.
That is possible today because it was easy for somebody to invest in these ideas.
Fewer ideas?
The higher something is taxed the more expensive it is to make and less of it is produced.
In essence, the capital gains tax is a tax on ideas.
Years ago the owners of Clarity Media Group decided to invest in an idea despite knowing that notion would be taxed at 15%.
If congress acts on President Obama’s State of the Union address last night and starts taxing ideas at thirty percent instead of fifteen he runs the risk that – as far as ideas go – people in America simply aren’t going to have as many of them.
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A free podcast of Laura Ingraham's full interview with John Boehner is available here
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