Once again I have to voice my disagreement with Victor Reilly’s comments in his recent letter about Mitt Romney’s finances and his use of the 15 percent capital gains tax (“Romney’s tax rate unfair,” Jan. 27).
Reilly seems to forget that Romney first had to earn the money from salary (taxed at a much higher rate) to invest to receive investment income. Reilly’s entire letter finds fault with Romney’s financial success in spite of the fact that Romney pays a far greater amount of taxes than most of us.
It also implies there is something wrong with being successful. Isn’t that what it’s all about? The opportunity to be successful? The wealthiest 25 percent of Americans pay 87 percent of federal taxes. Romney’s use of the 15 percent rate is the law of the land. President Obama extended this 15 percent rate through 2012 (and it will expire at year’s end) by legislation passed through a Democratic Congress and signed by the president. Can it be all bad if Democrats proposed it?
Here are some additional facts about this preferred rate: It was passed by Congress to provide incentives for investors to make capital investments to fund entrepreneurial activity, and to compensate them for the effect of inflation and the corporate income tax. In other words, it’s seed money to get business going and growing, and a reward for taking a risk on the enterprise becoming profitable.
Incidentally, the Simpson-Bowles bipartisan committee formed by Obama to address the nation’s financial woes recommended elimination of the 15 percent rate. After thanking the group, the report was filed without action by the president.
This republic was founded on the basis of free enterprise. The system has worked well for more than 200 years and is admired throughout the world. People from other countries flock to our shores for the opportunity to better themselves. We should be demanding elected officials to allow Americans to do just that.