Thursday, September 27, 2012

Taxing Thoughts

Mitt Romney said during his recent 60 Minutes interview that it was fine for him to pay a 14 percent federal income tax rate because his capital gains have already been taxed at a much higher rate at the corporate level.

Whether that's true or not is debatable, given the fact that a number of corporations manage to pay no federal income taxes, but even if it is the case for the companies he is invested in, so what?

I like this comment by a user named thurbers, which I saw in on a post by progressive economist Dean Baker on FireDogLake:

I’m sick to death of the trope that we don’t tax things twice. Let’s just forget that until it gets into your hands, any taxation that has occurred shouldn’t really count. If taxing twice is a problem, every Republican in the world should be against sales taxes since that is most certainly being paid in dollars that have already been taxed in most cases.
The same applies to the inheritance tax. Clearly, the person who is bequeathing the money has (probably) paid taxes on it, but the person inheriting it hasn't. It's income to them, and unearned income at that. More like game show winnings than earned income. Or gifts -- which are taxable beyond $13,000.

I believe there should be some accommodation for inherited property, such as farms, and maybe businesses, but inherited money and investments -- and capital gains, carried interest, and all the rest of chicanery -- should be taxed the same way earned income is.

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