Bruce Bartlett has penned this column on that topic. He outlines a number of features of former Governor Romney's tax plan, including that it provides more favorable tax treatment for capital investments than for labor (that is, wages). (That's true, too, of President Obama's tax plan, which, as I understand it, would increase the capital gains tax rate, but not to the level paid on ordinary income such as wages.) Bartlett sets up his discussion with some statistics showing who gets hit hardest (and softest) by differntial tax treatment of capital and labor:
According to the Tax Policy Center, in 2011 those in the middle of income distribution got about 70 percent of their income from labor and only about 3 percent from capital. By contrast, those in the top 1 percent of income distribution got 30 percent of their income from labor and 35 percent from capital. The disparity is even more pronounced when one looks at the distribution of aggregate capital income. The total came to $1.1 trillion last year. Of this, 86 percent was earned by those in the top 20 percent of households, ranked by income. But this figure is misleading, because within the top quintile, the vast bulk of capital income went only to those at the very top.
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