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[quote=Anonymous][quote=Anonymous]Whether investment income should be taxed at a higher or lower rate than 15% and whether it should be taxed at a higher or lower rate than non-investment income should not turn on the small percentage of extremely wealthy people in the country.  He's rich and now makes most of his money by investment. I already know that. I can guess that a lot of his income is taxed at 15% now. He follows the tax laws, I have no doubt, he's smart enough to do that.

So, again, I don't care one whit if his personal rate is at or slightly below 15%. Good policy for the country on these questions doesn't turn on what he makes.[/quote]

And guess how much he paid when he was earning his money?  Do you think he paid top rates?  No no no.  Because since he was running a LBO firm, he got paid in carried interest.  This means that his income  - not for his investments but for his labor - was taxed at capital gains rates too.

If you or I work, we pay income taxes.  If we get stock or stock options, we pay income tax rates on that.  Can you think of one good reason why the manager of an LBO firm, hedge fund, or VC firm should get to pay capital gains rates for their work?[/quote]

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