Super Rich Pay Less

www.msnbc.msn.com/id/19762041/site/newsweek

Regarding the Newsweek article entitled “Taxing The Super Rich” - I was both intrigued with and inspired by the attitude demonstrated in the quote attributed to Warren Buffett. It is my opinion that the assessment of Mr. Buffet is correct.

Large private-equity partnerships are capable of generating enormous sums of money. However, the partners of these firms are merely very high paid money managers who receive a percentage of the profits generated from the purchase and sale of the stock of publicly traded companies in exchange for their money management activities. In any other venue, the income that they generate from their money management activities would be treated as ordinary income subject to tax at the highest marginal income tax rate of 35%. It is galling that corruption at the congressional level has created a loop hole in the tax system that treats this ordinary income as long term capital gain income taxed at a maximum tax of 15%.

What is laughable and sad at the same time is the effort being marshaled by Wall Street to cast the closing of this terribly unfair loophole as an attack on the American capitalist system. Our system has never been exactly fair. But, neither is life. It just appears unseemly that a person making a billion dollar income pays tax at a rate that is lower than his own secretary. In fact our history is full of examples of instances wherein the super wealthy lobby for the benefit of paying little or no taxes on the basis that any tax that they pay somehow leads to an increase in impoverishment of those who are not super wealthy.

Apparently Mr. Buffett understands that to remain cohesive, those in power must scrupulously maintain a social contract that in fact if not in image actually supports the dreams and ambitions of those not yet in power.