If you are a working person, you may end up paying up to 35% of your income in taxes, yet as an investor (non-worker) the most you pay is only 20% in terms of the Federal tax rate. We are talking about the tax rates on ordinary income earned by working Americans, versus the tax rates on passive income, such as the capital gains—investment income derived from property, stocks, bonds, etc.—of corporations and wealthy individuals.
Moreover, there are legal distortions of the tax code that defy concepts of equality and fairness, an American trademark. The U.S. tax system feels unfair when the National Football League is allowed to file as a tax-exempt organization, despite $255 million in revenue and compensation of $29 million to its commissioner in 2011.134 This is all legal according to the IRS Code 501(c) (6),135 which states:
"IRC 501(c)(6) provides for exemption of business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues (whether or not administering a pension fund for football players), which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.".
