We received a number of emails from readers who objected to John Edwards’ assertion, in his debate with Vice-President Cheney, that “millionaires” who receive dividends pay lower taxes than soldiers in combat, pointing out that such soldiers’ incomes are not taxed by the federal government at all. Today’s New York Times Corrections section acknowledges that our readers were right:
An article yesterday that examined statements by Vice President Dick Cheney and Senator John Edwards in their debate on Tuesday night incorrectly supported Mr. Edwards’s statement that millionaires who receive stock dividends pay “a lower tax rate than the men and women who are receiving paychecks for serving on the ground in Iraq.” While some military officers may pay a higher rate, most soldiers do not. The monthly pay of enlisted troops in Iraq, as in other combat zones – and the pay of officers there, up to a ceiling – is exempt from federal income taxes.
More fundamentally, of course, it is unfair to compare taxes on dividends to taxes on income, since the person who receives dividends ordinarily has already paid taxes on his income before he invests the remainder.