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View Diary: Mitt Romney: It's fair I pay a lower tax rate than people making $50,000 (348 comments)

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  •  Income inequality attributable to capital gains (0+ / 0-)

    A recent (Dec 2011) Congressional Research Service Report entitled "Changes in the Distribution of Income Among Tax Filers Between 1996 and 2006" identifies increases in income from capital investments as a main cause of income disparity.  The author Thomas L. Hungerford states "Changes in capital gains and dividends were the largest contributor to the increase in the overall income inequality."

    You can find the report in a rather strange place - the website for the Federation of American Scientists.  They normally concern themselves with nuclear war and such.

    To another point made earlier, IMHO the double taxation argument is bogus because while the corporation paid taxes on retained earnings, i.e. income, the investor paid capital gains on the increase in market value of the shares - a totally arbitrary amount assigned by whims of the market.   The value of the stock has little to do with whether the corporation earned income in the year of the stock sale, but instead is a reflection of whether the the new purchased thinks the corporation will earn income in the future worthy of the purchase price.  

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