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Have you noticed how President Obama is forever beating his class-warfare drum? How many times have you heard him and his minions on talk shows claim the nation’s debt problem is due to the rich not paying their fair share in taxes?

Is the President being honest or intentionally misleading the public for political gain?

The truth is that if a significant amount of someone’s income is capital gain, then his average tax rate will be lower than his regular tax rate. Why – because capital gain income is taxed at a lower rate than regular income.

You see, people invest money they have already paid regular taxes on. And when those investments are held in excess of one year, profit on those investments are taxed as capital gain. So, when the investor combines his capital gain taxes with his regular taxes, his average tax rate is obviously lower than his regular tax rate.

And the President says that is wrong. He says taxes on capital gains should be as high as regular taxes.

But the President is purposely omitting part of the picture. He is omitting the fact that investment losses exceed investment gains. That means that even though some people realize capital gains on their investments, others actually lose.

Did you ever hear of stock market corrections or downturns? What about business closings?

Financial investments are a gamble; one might win, but one might also incur a loss. So, if someone is willing to risk money he has already paid taxes on, is it not fair that that money be taxed at a lower rate the second time?

It is a shame the President and his minions did not study free market economics in college instead of Marxism.


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