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Jim Webb: Romney’s a “classic example” why we need to raise tax rates on “passive income”

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Now, this is the Jim Webb that captured my imagination in late 2005 and 2006!

We’re in a situation right now where corporate CEO [income] multiples in terms of working people are as strong, and in some cases stronger, than they ever were. And if you look at the debate that we’ve been having over the past 7 or 8 months, the 99% vs. the 1%, I’ve been really concerned that we’re not really focusing on how to fix the problem when we look at the 1%. I’ve consistently said that I do not believe we should raise taxes on ordinary earned income, no matter how much ordinary earned income you’re making, I mean that’s how you succeed in America. But we really do need to fix the formula when it comes to capital gains and dividends — passive income. And you have a classic example of that now, I  mean you finally have a human face on it in terms of Mitt Romney and other people who are making all of their money in that respect

…[the 15% passive income tax rate] is as low as it’s been in a very very long time…If we need revenue to solve our problems, the best place to get to it and to restore economic fairness is in this passive income. Mitt Romney – I don’t mean to pick on him, he’s one of many, he’s obeying the tax laws as they now exist – is going to pay, I think 14% of his income; if you have earned income, you’re going to pay double that. This is exactly what Warren Buffett was saying, by the way, when he was saying that his secretary was paying a higher rate than he was…

…I think as a beginning step, you should put the capital gains and dividends to where they were before the Bush tax cuts, which would be putting it up to 20%…the Wall Street Journal’s not going to like that. In the long term, I think we should push towards consumption taxes…but certainly you should be able to say, that if I go out and work every day, whether I make $50,000 a year or $5 million a year, the taxes that I pay should be equivalent to someone who can sit back with a passive investor and with accumulated wealth be able to have an income and only pay 15% on it. And the key here is if we agree we have to raise revenues in order to fix our economic situation, and I believe we do, then we have to start with capital gains and dividends, and Romney’s situation is a classic example of that.

Exactly right — more of THAT Jim Webb, Jacksonian economic populist, please! 🙂