Taxing Capital Gains

The New York Times was, of course, correct to argue yesterday that private equity firm managers should need to pay the normal income tax rate rather than the much lower capital gains tax rate. The larger story, however, is that all income should be taxed according to a single rate schedule. Right now, capital income is taxed much more lightly than labor income, which is great if you're rich, but otherwise not such a hot idea.

Ron Wyden has a proposal to clean this up, which seems to be in some ways modeled on this older proposal from the Center for American Progress. I'd like to see presidential candidates take this issue up.