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Behold the Taxpayer Behind the Tree


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The media, for the sake of its own dignity, probably should have resolved not to salivate so predictably. Those who fill Web pages with free association quickly opined that private-equity managers don't deserve their paychecks the way Paul McCartney or Bill Gates or star athletes do. But aesthetic judgments about which large incomes are meritorious are hardly a basis for a tax system. A more serviceable principle is that income from like sources and activities should be taxed in like fashion.


Mr. Romney's recent income is obviously not a wage. He hasn't held a job in years. He's living off his investments. But when you come down to it, many Obama supporters believe (based on semantic reasoning) that income is income, and anything customarily called "income" should be taxed at the same rate—which means taxing capital gains at the same rate as wages.

Yet this would be a terrible incentive, treating investing as an antisocial act to be punished. Under the current structure of rates, not only would savers be taxed heavily on illusory gains, but to invest would be to accept a disconcertingly high chance of losing purchasing power in real terms after taxes.


WSJ Video: Opinion: Mitt's Taxes
Steve Moore on how much Romney pays in income taxes and why he should release his tax returns.
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