15% cap gains tax - WTF?
Bush's tax cuts for the highest brackets were ridiculous to begin with. But the tax cuts on cap gains and dividends was even more ridiculous. For all the Republican talk about stimulus (as if they could stimulate anything except stock speculation), I have yet to hear a convincing explanation why on earth you should pay a 30% tax on the earned income and only a 15% tax on unearned income. Do these Republicans believe that holding a stock for 365 days and selling it at a higher price is harder than flipping burgers or moving furniture and should accordingly deserve a greater reward? The only sense in which it is true is that with such dedicated support of the stock market by the government, it did become an intellectual challenge to find a stock that still has a room to go up. But nevertheless, I'd say equating this challenge to the challenges of a real job is taking it too far.
It is a good thing that Obama wants to raise unearned income tax by 5% for the top brackets, but such toothless half-measures won't take us very far. What's really needed is a return to common sense. As a minimum, capital gains and dividends must be treated the same way as any other income. If you want a way to simplify the tax code - this is the way.
P.S. Buffett's mouthpiece points out the stupidity of keeping Bush's tax cuts. A recommended reading for everyone.