By JLP | November 11, 2009
BG left the following comment on one of my previous posts:
“JLP won’t like me saying it, but even the ultra-rich play this game where their “income” (dividends & investments make up the majority of their income) is only taxed at 15%, whereas I’m in the 25% bracket. That is their gain, my loss.”
The reasoning for this is simple: dividends are taxed at the corporate level and again at the individual level. That’s why they are taxed at a lower percentage at the recipient level. If the “ultra rich” are getting all of their income from dividends and investments, that tells me that they probably already paid their fair share into the system in the first place.
This is one of the reasons why I like the flat tax. Charge everyone the same percentage on ALL INCOME regardless of what type of income it is. I would even concede a certain threshold (a first for me) in which individuals and families falling below a certain level do not pay taxes at all. The threshold would have to be low as I think EVERYONE should pay their fair share.
It’s not going to happen but I can dream…