Sure it can. I make such a comparison right here. http://pdxjjb-econ-politics.blogspot.com/2012/05/parable-of-smart-frugal.html
It's not that your arguments are incorrect, but they are not very strong arguments, either. Jeff On Tue, Oct 16, 2012 at 8:52 PM, Craig Haynie <cchayniepub...@gmail.com>wrote: > > On 10/16/2012 11:07 PM, Jed Rothwell wrote: > >> >> Gates himself, along with many other self-made wealthy people, including >> Buffet and me, are in favor of modest redistribution tax policy. We think >> it is not fair that people like Buffet pay lower taxes than a secretary or >> a bus driver. We are not socialists or communists. We have a right to our >> opinions. >> >> If you keep bringing up politics, then I have to keep challenging you on > it. > > 'People like Buffet' pay lower income tax rates because their income is > generally based on capital gains. This is not the same kind of an income as > that of a bus driver, for these reasons: > > 1) A bus driver's income is consistent from year to year. A person who > lives on capital gains, does not have a stable income. Frequently, years go > by when he loses money. > > 2) Capital gains is not indexed for inflation. So, say there is a 7.2% > inflation rate. If a piece of capital is held for ten years, and if it > doubles in value over those ten years, then there is no increase in wealth > over the increase created from the inflation rate. Yet, if the capital is > sold, then it will incur a 15% tax rate on the difference in value from the > purchase price and the sale price. So, in effect, the capital will be sold > for the same price as that for which it was paid, and yet the owner will > still pay a 15% tax on the difference in price. This is an effective loss, > for which the owner is taxed. > > The two forms of income cannot be compared, and yet people still want to > try. Sometimes, people will say that some of the wealthiest people pay no > taxes, but what they are referring to is the special case that occurs when > some people actually lose money over the course of a year. The US > government has never had a wealth tax, and if wealth is lost during a year, > then no tax is owed. The wealthiest Americans will frequently lose wealth > during bad years, and pay no income tax. This is correct and expected. > > Buffet does not pay lower taxes. Rather, his tax rate cannot be compared > to other forms of income in an honest fashion. > > Craig > > > >
