Thursday, September 22, 2011

Does John Cornyn Not Realize that Capital Gains is a Form of Income?

I guess private citizens don’t have the right to express their own views on tax policy without the Republican Party demanding to see their tax return:

Republicans on Capitol Hill have found a new hidden document conspiracy to push to now that President Obama's long-form birth certificate is a matter of public record. Warren Buffett, they demand, show us the tax return!

But what cracks me up is this statement from Senator Cornyn:

I know that Mr. Buffett's not likely to release his tax records but I'll bet what it'll show you is that most of what he earns is from capital gains, which is taxed at a 15 percent tax rate rather than deriving it as income [for] which he'd pay a much higher tax rate," Cornyn said. "If he doesn't derive ordinary income and if all of his, what he puts in his pocket is based on capital gains, I think that would be an important information.

Capital gains allow one to either consume more or enjoy an increase in one’s wealth. So it is income – but income taxed at a much lower rate than other characterizations of income. Which is the point that people that Mr. Buffett are making. If someone does not understand this simple point – then why are they qualified to serve in the Senate?


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