shipperx | Why 'Flat Tax' is Regressive...(Because I feel the need to fruitlessly gripe)

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For one thing, the 'investor class' doesn't make their income primarily from their salary/ wages.

From an article breaking down Rick Perry's "Flat Tax" plan:

Leaving aside the fact that it is layered on top of the existing tax code, [Perry's plan] establishes not one but two different tax rates: 20 percent for wages, and zero percent for investment income. Because capital gains and dividends would be sheltered from taxes under Perry’s plan, some of the wealthiest Americans would wind up paying nowhere near 20 percent overall. [...]
Since the legendary investor [Warren Buffett (who recently released his tax records as an example of the way that the 1% effectively pay a lower tax rate than the middle class)] receives most of his income from capital gains and dividends, Perry’s plan wipes out most of his already-low tax bill.
Buffett reported $62,855,038 in income on last year’s tax return while receiving only $600,000 in compensation from Berkshire Hathaway and the Washington Post Co. (where he is a director). If, aside from that $600,000, all of his other income is from capital gains and dividends, Buffett’s effective federal income tax rate under the Perry plan would be a microscopic 0.2 percent. Buffett’s tax bill would be slashed from the $6.9 million he actually paid in 2010 to $120,000.

Basically, if you make millions/billions, chances are it's heavy in stock options (because other than athletes and entertainers who else makes that kind of money except CEOs, CFOs, bankers, and stock brokers?) For the 'investor class' a large percentage of their income comes in the form of dividends, stock options, deferred interest, etc. (and, as we've learned from exotic derivatives, AIG, and hedge funds, "investment" doesn't necessarily mean investing in anything. Not in any real sense. It can be shorting the market or derivatives trading, etc. It's moving numbers around, not going anywhere productive. It's essentially gambling... although if you're Goldman Sachs, its gambling on a fixed game. You're the house. But that's a slightly different issue.)

For the middle class, a flat tax is a tax on virtually everything they make. It's their salary... For the investor class, salary is a small fraction of their actual income... the majority of which under most of these "flat tax" plans wouldn't be taxed at all or (as it is currently) taxed at a far lower rate.

So, we pay on everything. They pay on just a little bit of theirs. That's fair... right?