Wednesday, April 16, 2008

Kudos to Obama on Taxes

Every once an awhile you'll hear the ditty about how Warren Buffett pays has a lower effective tax rate than his secretary and what a travesty this is. I agree that it is a travesty but Democrats then use it as a rallying cry to raise income taxes. There is only one problem with this, it wouldn't do a blessed thing to Warren Buffet's effective tax rate as most of his income is derived from capital as opposed to labor (which are taxed at different rates: 18% v. 35% for the highest income tax bracket). Obama correctly noted this in conjunction with the Buffett story and argued that the story presented a rationale to raise capital gains taxes not income taxes.

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