Senator Webb: To Restore Economic Fairness, Start with "Passive Income"
Statement
Senator Jim Webb (D-VA) issued the following statement regarding the theme of economic fairness in tonight's State of the Union address and recent headlines:
"I have consistently said that I do not believe we should raise taxes on ordinary earned income--that's how you succeed in America. But as we begin to move forward and to restore economic fairness we need to fix the tax formula for capital gains and dividends, which are passive income. The tax rate on capital gains is as low as it's been in a very, very long time.
"You finally have a human face on it in terms of Mitt Romney and other people who are making most of their money through passive income. He paid 14 percent of his income in taxes--a classic example. If it was earned income, he would have paid double that. This is exactly what Warren Buffett meant about his secretary paying taxes at a higher rate than he was.
"I don't see evidence that Congress wants to return the capital gains and dividends tax back to where it should be. To be frank, the financial sector has enormous power in both parties in terms of re-election campaigns, and it inhibits the debate we need to have. So the people are ahead of the politicians on this; people are looking for fairness. If I go out and work every day--whether I make $50,000 a year or $5 million a year--the tax rate I pay should be equivalent to someone who can sit back with passive investments and accumulated wealth. The key here is if we agree we have to raise revenues in order to fix our economic situation--and I believe we do--then we have to start with capital gains and dividends."
Background: In his 2007 televised response to President George W. Bush's State of the Union address, Senator Webb warned of the dangers of the growing economic divide in America: "When one looks at the health of our economy, it's almost as if we are living in two different countries. Some say that things have never been better. The stock market is at an all-time high, and so are corporate profits. But these benefits are not being fairly shared. When I graduated from college, the average corporate CEO made 20 times what the average worker did; today, it's nearly 400 times."
Source