Mitt Romney’s taxes are being released today and the story will continue to be about his effective tax rate of 15 percent. Although he is a portion of the 1 percent his taxes are much lower than most Americans (actually 25 percent of those in the 1 percent pay around 15 percent). This is at no fault of his own but is the fault of the system in place. Like many wealthy Americans he makes his money from investments or capital gains, which are taxed at 15 percent.
There are objective arguments for and against having a lower or higher capital gains tax rate. However, I want to propose a more subjective argument. By and large the capital gains tax rate affects the wealthy. Therefore, having a lower capital gains rate helps wealthy people become wealthier. (Just a note the capital gains rate is at an all time low) Rich people getting richer is not an inherently bad thing, but currently we face massive debt, an expensive healthcare and education system and a social security system in need of reform. A way to help these problems is by increased tax revenues. So, the question becomes should we tax poor and middle class Americans more or should we ask that the wealthiest people pay a little more in taxes.
This goes beyond simply raising the capital gains tax rate. It harks to the type of society in which we want to live. Do we want to live in a society where the rich keep getting richer at the expense of middle and lower class citizens? Do we want our unprecedented income inequality to continue to skyrocket? Beyond finances do we want 30 million Americans to continue living without health insurance because it is too expensive? I think most people would not consider that an ideal society.
This relates to Ron Paul’s message of personal accountability. I am not against this notion but I am against the idea of letting a man in a coma simply die because he does not have healthcare as was alluded to in an earlier Presidential debate. Again last night he called for more freedom, less government and increased personal accountability. Not that those are bad ideals but the consequences of those ideals allow people to go hungry if they cannot afford food or go without medicine if they cannot afford healthcare or be homeless if they cannot afford a place to live. It would be great if everyone was accountable for himself or herself but I do not want to live in a society that punishes people who are not. I want to live in a society that helps people who have made mistakes or are less fortunate or suffer from poverty.
So this comes back to the low capital gains rate. Yes, those people who earn their income through capital gains work hard and are successful and wealthy. However, it is not unreasonable to ask them to pay more taxes on that income. It is not class warfare to ask wealthy people to pay more. Increasing taxes does not reduce freedom. If you disagree, I ask you to think about in what type of society do you want to live? One where the less fortunate are left to fend for themselves in the name of personal accountability or one where people help one another and sometimes that may mean wealthy people paying more.