The case of Teresa Heinz, the ketchup heiress married to Sen. John Kerry, the Democratic presidential candidate who wants to hike taxes on the "rich," is actually a good argument for cutting taxes on the rich. Last year, Heinz had $5.1 million in income, and paid $587,000 in federal taxes, making her effective federal tax rate only 11.5%. Why did she pay so little tax? Rather than fully invest her fortune in productive private sector enterprises-thus creating private sector jobs and earning taxable profits-Heinz sheltered much of her money in tax-exempt government bonds, taking more than half her income from the government itself.
