Over the last three decades, the richest Americans have seen their incomes tripled, even after adjusting for inflation, while the rest of us have seen a loss or no growth in income. The wealth has already been redistributed, from those who could least afford it to the very wealthy. The strength of our economy depends on the strength of the middle class. It is time for Congress to act. It is time for a tax code where the wealthiest pay their fair share.

Mitt Romney, the former Governor of Massachusetts and presumed Republican presidential nominee, was compelled last month to release his tax return from 2010. The return showed he and his wife had an adjusted gross income of $21.7 million, and they paid an effective tax rate of 13.9 percent. Romney isn’t just in the top 1 percent of wage earners, he’s in the top 0.006 percent. The highest marginal tax rate in this country is 35 percent, more than twice the rate paid by Romney, so it is natural to ask “Why?” Why was Governor Romney only required to pay 13.9 percent in taxes? The answer lies in the U.S. tax code.

There are two types of incomes and these are taxed at different rates. The first type, the kind that applies to most Americans is called ordinary or earned income. Ordinary income is income generated by producing goods or providing services, most anything that would be considered a job or career would fall into this category. Ordinary income is taxed at progressively increasing rates up to the maximum rate of 35 percent for taxable income over $388,000. If Governor Romney’s income had been ordinary income then his effective rate would have been 34.7 percent and his tax obligation would have been well over twice what it was.

The reason Romney paid so much less in taxes is because his income is of the second type, capital gains income. Capital gains are profits made from investments, primarily in stocks, bonds and real estate. The tax rates for capital gains are also progressive, but with a maximum 15 percent rate. For the richest Americans, most of their income comes from capital gains. Because of the lower rate, the top 1 percent of wage earners, those who make $1.3 million or more per year have a lower tax burden, as a percent of their income, than those who earned $140,000.

Again, we might ask “Why?” Why are capital gains taxed at a lower rate than earned income? The arguments for the lower rates are threefold. First, since the money invested was previously earned, any tax on profits amounts to an additional tax on top of an already paid tax. Secondly, the investments are inherently risky and could suffer a capital loss. And finally, investment is needed to start and grow businesses, which creates jobs. So, with a lower tax rate, investors are more willing to take the risk and that helps the economy.

All of these arguments are flawed. Gains are precisely that, profit from investment and not previously taxed at all. Capital losses may be used to offset gains, and carried over to future years, so while there is some risk of loss, this is heavily mitigated by current tax code. Finally there is no evidence that lower rates on capital gains spurs investment, historically capital gains rates have been much higher than they are now and there has been no lack of investment.

President Obama is urging Congress to restore the top marginal tax rates to the levels before the “Bush tax cuts” and also to raise capital gains tax rates to Clinton era rates. These are not draconian changes despite the claims made about ‘redistributing the wealth’ and ‘punishing achievers’. The fact is that in the last 30 years the top 10 percent of wage earners have seen their incomes rise by more than 200 percent, that is they are making more than three times what they made in 1982, while the bottom 80 percent have seen zero increase in real wages over that same time. The economy has grown but every dime of that growth has found its way to the upper echelon of our workforce.

Restoring tax rates is not class warfare. The wealth has already been redistributed to the top. There is no doubt that we must find ways to make government more efficient, but just as important, everyone should pay their fair share.