We hear a lot of talk about reforming entitlements and those who want to reform them consider Medicaid, Medicare and Social Security to be the entitlements that need to be reformed. But there is another entitlement that we don’t hear much about. Current income tax regulations entitle those who have income from dividends and capital gains (income from wealth) to pay a maximum tax rate of 15 percent, while income from work may be taxed as a maximum rate of 35 percent.
We who are recipients of the entitlements of Medicare and Social Security paid for these entitlements over a lifetime of work. Perhaps we did not pay enough, or maybe we just lived longer than we were supposed to, but we did pay for them. Those who received the entitlement of a maximum 15 percent tax rate on their income that was generated by their wealth did not pay anything for their entitlement, except perhaps in political contributions to buy the votes to keep their entitlement in place. This entitlement is what allowed Mitt Romney to pay about 13 percent in taxes (15 percent, less some charitable deductions.) It is also what allows Warren Buffett to pay taxes at a lower tax rate than his secretary.