To be fair, I think there IS a difference between income, and interest off of investments. To put it in simple terms, any wealth one accumulates has already been taxed once. It was taxed when it was earned, or when it was earned by whoever entrusted it to another. Once that money, which has already been taxed the first time around, gets invested and starts to generate income in the form of interest, it gets taxed AGAIN. If Mr. Peterson has found a means to have that money taxed at a lower rate, I don’t blame him. If I ever attain enough wealth to have my money work for me, I wouldn’t wish my tax rates on that return.

Reading further down the comments, I see that Midnight has already briefly addressed this, but it deserves a second mention.

If you provide me factual information then I’ll throw out what I suspect in favor of what you prove to be true. Did you read the next sentence after I espoused my suspicion: “I certainly could be wrong.”

Then you state “As it states in the article, and I think you know this as well, investment income is taxed at a lower rate than earned income. You do realize that?” No, I don’t realize that because I don’t know it to be true from past experience and the only evidence you will provide that it is true is your word and that of the NYT article that is an article on Peter Peterson and not tax policies. Yes, the article mentions taxes–fleetingly– but the article is not about taxes. If you don’t see that the NYT article on Peter Peterson is not proof of your point then we are not going to be able to debate anything, because that will mean we do not share a common logical definition of proof. Please read this carefully: I don’t dispute that it may be true, but you haven’t provided any substantial information on it that will help me or anyone else understand that it is true or why this is so. All tax policies have an underlying reason, even if the reason is flawed.

The issue is not that I disagree with you. The issue is that I’m making you prove your point to me. So far you haven’t proven anything with credibility beyond what the registered commenter “Neuville” says on The Midnight Hour blog. I could probably google a few terms and have the answer in minutes. I won’t. I’m tired of doing the research for both sides of these arguments.

I am challenging you: can you, as a liberal, logically prove your claim that the wealthy are taxed at an overall lower rate than middle class Americans? I’m just asking for a couple links to a reliable and unbiased source(s) that discusses the point in detail, and a short synopsis of what the source says. To your credit, the info on private equity partnerships is helpful, but only one piece of the puzzle.

Be fair. Ask me for all the specific dots and dashes of the tax code and then you base your conclusion on what you “suspect”. I suspect you have already made up your mind and do not care about the details. However, consider this. As it states in the article, and I think you know this as well, investment income is taxed at a lower rate than earned income. You do realize that? Ok, Private equity partnerships were set up to allow the very wealthy set up what amounts to a mutual fund managed by a professional manager. They differ in that the earnings are taxed at the investment rate. They usually have a large minimum investment of at least a million dollars and many much higher. In addition they are given access to IPOs that the general public is prevented from participating in. The bottom line is partidipants are in these partnerships have rules that favor them greatly over the general public. As to if their money has already been taxed, there is a corporate tax, but to call this a double tax is a not accurate. It is a tax on corporate profits before profits are distributed. It is not really a tax on the investor, but on the activity of the corporation. To some extent it encouraged the corp. to reinvest in itself.

I was taught to use examples to understand underlying principles. You can’t just examine examples and claim to understand the principle. What are the specifics of this “private equity partnership.” Again, I suspect that the money in question has already been taxed once, and now since a billionaire has put it to good use that all of America deserves a cut because he made a wise investment (so sayeth the left). I could certainly be wrong. Please help me understand.

“It is a quandary that has plagued Mr. Peterson for years. And while he supports increased taxes on the wealthy (along with broad-based benefit reductions), he remains firm in his defense of the special provision for private equity partnerships despite the view of many on Wall Street, including the billionaire investor Warren E. Buffett, that the rate is too low.”

They are called “private equity partnerships”. This flies in the face of your desire to have a flat tax. When you add in payroll taxed you and I pay a rate nearly four times higher than billionaires in private equity partnerships.

In essence, you have claimed that since the statement appears in one NYT article that it must be true. It may indeed be true, but the NYT article is not proof of that.

Tell me about what income is taxed at a lower rate than the standard income brackets and we’ll talk. Let’s examine the rules–tax code–not anecdotes. I suspect it will be “income” derived from investments made with income that has already been taxed when it was earned as labor.

I certainly hope I am mistaken about the link and you haven’t built an opinion on our tax system based on what is “clearly shown” in that article. It may still be true (I’ll give you the benefit of the doubt), but that article does nothing to prove it.

On the second issue I am looking for the crux of the argument where our fundamental reasoning differs, but I cannot find it. I agree Alabama as a whole has a long way to go. The city where I live, Huntsville, is really an island of technology and education in the southeast. I wouldn’t choose to live anywhere else in the state. I will read the NYT article you linked to the next time I have a spare moment.