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TAXES: Baird’s naive about tax rates

Letter by Ray Kmak, University Place on Feb. 2, 2012 at 9:03 am with 7 Comments »
February 2, 2012 12:20 pm

Re: “Loopholes for wealthy weaken fairness of income tax system” (Katie Baird column, 2-1).

It’s amazing that a supposed economics professor can be either so naive or so deliberately misleading in writing about various tax rates.

She does not understand nor convey that people who generate income from capital gains use their own money that has already been taxed as ordinary income. Then, as they invest in financial instruments and companies to generate income, they are taxed again at 15 percent. So, those who choose to invest and provide working capital to companies who can provide jobs are taxed twice, well above the 15 percent rate she quotes – which is totally misleading.

The idea that she continually advocates more and more taxes for her pet projects ignores the fact of who is paying. As the aging population increases, more people try their hardest to generate income from passive investment income to make ends meet, but she would have them taxed even beyond the double taxation already present in our system.

As to Warren Buffett’s secretary and her 35 percent-plus tax rate: Anyone with any knowledge of our tax system would quickly understand that her income has to be well above $200,00 per year to be in that category – hardly a comparative argument. And I’m sure she will soon be looking for passive investments generating capital gains to to achieve a lower tax rate given she would no longer have an income from wages.

Leave a comment Comments → 7
  1. wow, you really dont understand this issue at all, do you? it’s called carried interest. the interest. the profit made off of your investment. not your actual investment. the interest. the interest is taxed at 15%, while my wages are taxed at 35%. why is interest not considered earnings for tax purposes? maybe because you didnt EARN it? they consider the interest made off of your piles of cash to be more worthy of our corrupted system’s tax-breaks than actual physical labor. smart guys like you agree with them for some odd reason.

  2. beerBoy says:

    The income from investments is taxed ONCE. The idea that it somehow should be free money because the money you invested was taxed is completely absurd fantasy.

  3. oh, and before i get my paycheck, it is taxed. after i get my check, when i want to buy a good or service; it is taxed. once i spend my dollar on a soda (with tax), the seller then has to pay taxes on his earnings (which came from me, after it was taxed). then when he wants to spend that dollar, it is taxed again.
    This is very basic fundamentals of a tax system.
    Ray, you are totally clueless.

  4. concernedtacoma7 says:

    No BB, that investment income was already taxed before one receives it. When the individual pays his ‘fair share’, it is the second time the profit is taxed.

    Stick the emotional arguments, the left dies not understand facts and figures (like the debt the like to ignore).

  5. concernedtacoma7 says:

    Stick to the

  6. beerBoy says:

    ct7 – your profits from the investment income were not already taxed. Your investment was already taxed.

    If we are allowed to deduct losses from investments why shouldn’t we pay taxes on gains from investment equal to any other earnings?

  7. beerBoy says:

    Think of it another way ct7:

    A retailer pays sales tax and B&O tax on products he sells. From the income generated (which is already taxed) he then pays his employees who are then taxed on their income. How is this any different than the “double taxing of investment income” that you proclaim?

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