I'd actually venture to say that a great many of those 18% don't make enough earnings off their stock options for it to matter. If you've got $10,000 in stock stashed away and your dividends for the year are five hundred dollars, and you have to pay $100 in taxes because of that and an extra $50 of taxes would hurt your lifestyle, you've got bigger problems.
By that argument we should raise the income tax rate on poor people since it wont cost them much either. X% more in tax is X% more. It's relative to the amount of money you have invested, so it's always going to hurt you the same amount relatively speaking.
My father in law, great fool he is, had $100K in GM stock. GM undergoing debt restructuring means he lost 90% of its value in a few short weeks. It's since climbed back up to about half its initial value, but he won't be paying taxes on that for a long, long time, since it's still considered a loss.
Sure. And when he does make a gain off that investment, do you think that he should be taxed at a higher rate? Don't you agree that this hurts him a hell of a lot more than it hurts the multi-billionaires that Obama wants us all to focus on?
I believe the majority of folks with large amounts of stock would rather their stock do spectacularly and have to eat a larger portion in taxes than they would have their stock do poorly so they can pay lower taxes.
And if those relationships were the choices at hand, you'd have a point. However, the reality is that lower tax rates on capital gains tends to encourage more investment which takes advantage of that rate (ie: longer term investment instead of short term "playing the market" stuff). That investment itself tends to make the longer term outlook better.
Investors already have a choice to make fast money in the market, with the trade off being that they pay higher taxes. That's why short term capital gains are taxed as income (and why income rates must always be higher than long term capital gains rates). The lower long term gain rate is designed as a reward for putting your money into something for a longer period of time. The assumption of the whole system is that longer term investments tend to actually make the whole market grow and be more stable. Since we're talking about that long term capital gains rate here (that's what Warren Buffet gets and why his tax rate is lower than his secretary's), we're already speaking specifically about those who've invested in longer term things designed to generate greater sustained market growth. Taxing that at a higher rate is simply punishing people for doing the right thing with their money.
It's just interesting to me that it seems like current Democratic party economic policy seems hell bent on doing exactly the wrong things economically. If you were to come to me and ask how to make an economy do poorly, and recover slowly, and increase its odds of getting stuck in a recession without much chance of recovery, I'd suggest a list of things which look almost exactly like what the Dems have been doing (or trying to do) for the last few years. It's amazing that they've somehow hit on this as an economic strategy and even more amazing how many people don't realize (yet) just how horrible it is.