Buffet's comments are just nonsense though. He doesn't pay a lower rate on capital gains tax than his secretary does. Buffet is comparing federal income tax r

Buffet's comments are just nonsense though. He doesn't pay a lower rate on capital gains tax than his secretary does. Buffet is comparing federal income tax rate to capital gains tax, that's comparing two different things, like if I said I paid more in sales tax than the coupon rate on your savings bonds - maybe that's true, but so what? The reason why capital gains are taxes less includes things like you were already taxed on the money when you earned it before investing it so the capital gains tax is the second time you're getting taxed on that money, and that capital gains tax affect the risk to return ratio of investments. In other words, if you are taxed on capital gains more that diminishes the potential gains of your investments, while leaving your potential losses alone. If the balance of risk to reward shifts too much towards "risk" then investments will fall and the whole economy will suffer. I agree with you that our taxes should be simpler.