Tax, Mitt and Newt

I was pretty shocked as most people were no doubt to see recently that Mitt Romney paid 13.5% tax on his 40 million unearned income over two years, while Newt Gingrich paid 35% on his 1.4 million earned income, though I am not sure how he earned it. I almost felt sorry for Newt, struggling along on 75, 000 per month after tax. But then on second thoughts I didn't feel sorry for Newt.

Even more astonishing was the fact that Americans think it OK to tax unearned income at such a low rate compared to earned income. Come to think of it, we do the same, though higher rate capital gains at 28% is a little more realistic, though still grossly unfair, compared to 40% 0r 50% on earned income. Why was there not a bigger outcry over the revleations about the income of tax of these two presidential hopefuls ?

Americans are really strange people. If they did ask people to pay the same tax on unearned income as they do on earned income, and if they paid a little more gasoline tax, they wouldn't need austerity measures at all. Indeed a relatively modest rise in gasloine tax would pay for a free heath care service for all !

Equally interesting is the idea that wealthy people should allow their tax returns to be published. We should do the same. I note, incidentally, that one of the alleged reasons that Rangers fotball club is bankrupt is that the club was supposed to be paying the players' income tax for them and this may be the subject of the Revenue and Customs' problem - where is the tax ? This is also common practice in Italy apparently and many of their clubs are bankrupt too. Lessons to be learned ? The greeks haven't been paying their tax either, nor have many Italians. A theme is building up here.

Collecting tax efficiently and fairly is definitely the mark of a successful and stable economy. Fail to do it and the chickens will undoubtedly come home to roost.