our tax system, the method by which we might gently mitigate this trend has exacerbated that inequality. the top marginal rate has fallen from 70% before reagan to a low of 35% under the bush tax cuts. now extended through 2012. the capital gains rate, the taxes most wealthy people like mitt romney pay on the dividends and earns on investment has fallen to 15% today. on top of that, the tax code has also been eaten through with determination by the special interests of the wealthy, creating carve-outs and hidden pockets where they can hide their income away. to take one particularly egregious example, the notorious carried interest loophole, allows people that work in private equity and manage hedge funds to classify their income as capital gains, allowing them to pay the rock bottom rate of 15%. tax fairness advocates and progressives have decried this for years. every time changes are proposed to correct it, an army of lobbyists, what political
have earned income, it s all investments. but one of the lessons of about four or five decades of scandal and examination and in depth reporting is when you have your tax returns, when you have a problem, get it out. don t dribble it out. what he s done is said, well, it s about 15%, now he s going to have to release the details, those tax returns are probably going to be about that thick if not thicker because there are all kinds of old deals where he had tax breaks or tax payments and so forth and so people are going to take it apart. in all the tax debate. last year, 2011, the discussion never was let s raise this dividend and capital gains rate, but it now is going to be part of the discussion. and i suspect the white house and obama are going to land on it with their cleats. well, they re probably watching very comfortably because he s made it more
extraordinarily low salary. why? so he can cash in a 15% capital gains rate and we want to correct that, ron. and i think we should. but the president, well, the president is out dl actually speaking half truths. using the usual obama argument. putting together a proposal. the right loves the oracle of omaha. the right loves the oracle of omaha just as much as the left so you can t have it one way when you like him then say a rule that basically breaks it down is showing something false about what s going on with how he runs his business. and warren buffett owned up to tharks thomas. we re going to talk more about this. we have the mayor of l.a. standing by right now, but tara and ron, thank you, both. and on that point, today s mayors from across the nation
he used for it. and i am told that s the first time the laffer curve was ever drawn or described in that fashion. it s absolutely brilliant. the truth is, zero tax rate, you get zero revenue, at 100% tax rate, you also get zero revenues. and somewhere in that curve, you can optimize revenue without dissuading entrepreneurial activity and investment in this wonderful country. i became a believer. fast forward 2003, where we cut the capital gains rate, the rate on interest and did the across-the-board cuts on income tax and passed by a single vote, my vote. this was 30 years later. 14 months into the ford administration, cheney got a huge promotion. ford moved rumsfeld to defense secretary and elevated cheney to his chief of staff. i feel a certain pride in
how is it no one sat down hedge funds, they pay taxes at a capital gains rate, not an income tax rate. it s insane. it is nuts that no one sits down and reforms the entire system. it is nuts. i have to tell you, joe, the one place where i think you are a little off base. it s not hard to find editorial writers or op-ed columnists calling for entitlement reforms. it s not a hard thing to find. it s almost as received wisdom, conventional wisdom. talking the approval. generally like the new york times then get a specific program. i guarantee you the new york times will slash and burn any politician for going after grandma. they will. as i say, i think there s a pretty well established cannon