We are preparing our corporate clients for the low/no tax windfall on dividends. Our advice is to issue special classes of stock to officers and employees. This stock would entitle workers to substantial low-taxed dividends. In return, the salary and wages of these corporate employees would be reduced to nearly zero. Thus, the tax rate of workers would be reduced to match those of other investors such as Mr. Buffett, the Kennedys, Rockefellers et. al.
All you whiners need to realize I need to be richer. I don't want to pay capital gains on my inheritance, Jeez it my money, you didn't do anything for it. Thanks to Bush I didn't have to pay inheritance taxes (Estate) now all I have is capital gains. If you don't charge me that then I can move to france and get free medical. I mean really, pull yourselves up by your boot straps. This is both sarcasm, and reality.
2
You are not any teacher. You can't even tell the difference between capital gains tax on money already taxed once before versus inheritance tax from someone who has passed away.
Now your hatred of President Bush is more understandable. It's still sad, tough - Bush's economics created real jobs at a time people needed them.
Now your hatred of President Bush is more understandable. It's still sad, tough - Bush's economics created real jobs at a time people needed them.
No capital gains taxes demeans those who work and pay taxes on active income. All long term capital gains taxes now are a benefit to those taking advantage of it because the tax is always lower than their ordinary income.
What a giveaway to the wealthy and the antithesis of Bernie Sanders!
This is totally unacceptable.
What a giveaway to the wealthy and the antithesis of Bernie Sanders!
This is totally unacceptable.
1
Do you realize that the money involved in capital gains was ALREADY taxed at the regular income tax rates?
No insurance exists for money invested/risked on a business. If these people you have been trained to hate lose that money because the business went bust, that's it, sayonara.
BYT if you really hate the employer class, there is a solution. You just go ask a poor man for a job.
No insurance exists for money invested/risked on a business. If these people you have been trained to hate lose that money because the business went bust, that's it, sayonara.
BYT if you really hate the employer class, there is a solution. You just go ask a poor man for a job.
What is commonly referred to as the capital gains tax applies only to so-called long-term capital gains, i.e., gains on assets held for at least a year. The tax on short-term capital gains, i.e., assets held for less than a year, is the same as ordinary income tax. The long-term capital gains tax rate is a ceiling, not a flat rate. If a person's income is modest, he or she may already pay little to no taxes on his or her capital gains. Unlike real losses on other assets, for example, a home, capital gains can be offset by capital losses for tax purposes.
Considering that investing in the stock market is about the only way to effectively generate a high enough return on savings to fund one's retirement, the question is why more Americans don't do it.
Considering that investing in the stock market is about the only way to effectively generate a high enough return on savings to fund one's retirement, the question is why more Americans don't do it.
1
So we are already running budget deficits, our infrastructure is crumbling, there is a growing disparity between rich and poor, and this imbecile wants to give the rich even bigger tax breaks?
You can't change stupid.
You can't change stupid.
Rubio's plan will sure benefit his billionaire backer, Paul Singer, a New Yorker who makes his income from investments. Rubio is a puppet on a string.
Voters, you want to improve your lives? Don't vote for Rubio or any Republcan candidate. Demand something far better and insist on real campaign finance reform. Stop the über-wealthy elites from buying politicians to write laws for their own benefit instead of the other 330,000,000 of us.
Voters, you want to improve your lives? Don't vote for Rubio or any Republcan candidate. Demand something far better and insist on real campaign finance reform. Stop the über-wealthy elites from buying politicians to write laws for their own benefit instead of the other 330,000,000 of us.
I'm an investor and that's where I get my income from. I'd LOVE not to have to pay any taxes on my income or dividends. On the other hand, there is such a thing as a citizens duty to share the load and not dump the entire responsibility of paying taxe on the working man and woman. To be blunt, 15% is obscene. What about the poor working class single parent who has to work 60 hours a week and has to pay tax of 20-30% on their work.
All I have to do is sit in front of the computer and figure out which company is a better monopoly than the others - that's what we investor's ideally look for in an investment by the way.
And you'll find that these companies routinely fire thousands of workers so that shareholder can benefit from ever increasing dividends.
Rubio's plan will only benefit millionaires and billionaires. Such a plan is not in the interests of society, and just turn the United States into a banana republic, where 1% owns everything and everybody else are the working poor.
All I have to do is sit in front of the computer and figure out which company is a better monopoly than the others - that's what we investor's ideally look for in an investment by the way.
And you'll find that these companies routinely fire thousands of workers so that shareholder can benefit from ever increasing dividends.
Rubio's plan will only benefit millionaires and billionaires. Such a plan is not in the interests of society, and just turn the United States into a banana republic, where 1% owns everything and everybody else are the working poor.
5
Once again the Times neglects to describe the affect these tax plans will have on the deficit. Some of them will add as much as one trillion a year. You can't make that up by cutting waste, fraud and abuse or further cutting food stamps.
1
I thought the idea of higher
capital gains tax was to encourage holding your investments instead of speculating.
capital gains tax was to encourage holding your investments instead of speculating.
1
And Republicans wonder why they are hated!!!!
4
The entire question of how we treat capital gains is about employment. Reagan doubled the amount of income flowing into the federal government by cutting the income tax and, I think, capital gains taxes. He employed between twenty and fifty million jobs.
When big gov't people raise taxes, it always reduces employment.
SO, do you want the poor worker independent and supporting her or his family, or do you want them dependent on hand-outs? That is the entire question.
When big gov't people raise taxes, it always reduces employment.
SO, do you want the poor worker independent and supporting her or his family, or do you want them dependent on hand-outs? That is the entire question.
There is a growing movement in America for a new aristocracy with the rest of us their servants in a service economy. The idea of no taxes on wealth earned through investment or inheritance is a symptom of that trend. Those who inherit sufficient wealth will be free from working or having any responsibility for paying for public services. And, if they don't squander their inheritance, their heirs will have that same privilege. Its a return to England's landed aristocracy, a society that was rejected here at the time of the Revolution.
4
A better idea is a 100% tax on estates that are larger than $1M
Why should membership in the lucky sperm club determine your place in society without the need for you to have earned that position yourself?
Why should membership in the lucky sperm club determine your place in society without the need for you to have earned that position yourself?
4
Totally disagree. What if you could not pass money down to your children? Then once you earned enough for yourself youd stop working to build your estate, and Your productivity would fall. GDP would plummit
So then, why is the public more entitled to the wealth that an individual accumulates than their heirs? They did not earn it either.
It is apparent that I know absolutely nothing about economics and fiscal policy. It was and still is, my obviously incorrect assumption, that a capital gains tax encouraged businesses to reinvest their "gains."
Slightly off topic, but another GOP talking point are the so-called "Death Taxes." Again it was my, and I believe a gentleman named Thomas Jefferson, who believe(d) that eliminating estate taxes will create a new aristocracy.
Slightly off topic, but another GOP talking point are the so-called "Death Taxes." Again it was my, and I believe a gentleman named Thomas Jefferson, who believe(d) that eliminating estate taxes will create a new aristocracy.
The "double taxation" argument is one of the most enduring lies in the history of tax policy.
If corporations are "people" separate and apart from their shareholders, officers, directors, and employees, and if said "people" have First Amendment rights to spend "speech" without limits, then said "people" should pay their taxes just as humans do. And if actual humans (investors) enjoy a distribution of dividends after said "people" paid their corporate-person taxes, that is simply income for the investor and should be taxed accordingly.
This is the ultimate injustice of the useful legal fiction of corporate personhood run amok. The original idea was that corporations are "artificial persons" only for certain limited purposes, such as contractual capacity and the ability to own property, sue and be sued, and so forth as entities apart from their shareholders, principals, and employees.
But now the SCOTUS has chosen to elevate these business organizations to a status equal to actual human Americans. It's unbelievable that the GOP, having thus converted business organizations into people with constitutional rights ("endowed by their creator", no less) now claims that dividends are twice-taxed income that should enjoy favorable tax rates (or no taxation at all).
No, not really unbelievable. Nothing this rancid excuse for a political party advocates surprises me any more.
If corporations are "people" separate and apart from their shareholders, officers, directors, and employees, and if said "people" have First Amendment rights to spend "speech" without limits, then said "people" should pay their taxes just as humans do. And if actual humans (investors) enjoy a distribution of dividends after said "people" paid their corporate-person taxes, that is simply income for the investor and should be taxed accordingly.
This is the ultimate injustice of the useful legal fiction of corporate personhood run amok. The original idea was that corporations are "artificial persons" only for certain limited purposes, such as contractual capacity and the ability to own property, sue and be sued, and so forth as entities apart from their shareholders, principals, and employees.
But now the SCOTUS has chosen to elevate these business organizations to a status equal to actual human Americans. It's unbelievable that the GOP, having thus converted business organizations into people with constitutional rights ("endowed by their creator", no less) now claims that dividends are twice-taxed income that should enjoy favorable tax rates (or no taxation at all).
No, not really unbelievable. Nothing this rancid excuse for a political party advocates surprises me any more.
7
Here's the way this plays out when Hillary is elected. Hillary is a fighter who gets things done - so she'll dig in and propose cutting long term capital gains from 20% to a rate of 10%. Republicans will scream that high capital gains tax rates are costing Americans jobs and they'll vow to continue fighting to make capital gains tax free. Democrats will pound the table in their approval of Hillary's action. They'll claim victory because Republican efforts to eliminate the 23% highest capital gains tax rate altogether (which is actually a lot less for anyone making under $250k per year) were blocked by Hillary's triangulating strategy that gave them only 50% of what they demanded. Hungry children and disabled vets will still be told that there's no money for their needs.
5
What is your source on what Clinton will do?
Her entire past history, perhaps?
The theoretical possibility of unfair double taxation (the article's third rationale for taxing capital gains at a lower rate than earned wages) might make sense if companies paid reasonable corporate taxes to begin with. They of course do not, and Rubio (he mentions his old student loans ad nauseum) guarantees his future by pandering to his 0.01% paymasters.
3
America would be a better country and have a stronger economy if we reversed this idea. Do away with income taxes, at least for all but millionaire plus, and raise taxes on wealth, like capital gains, to fund government.
It would stop and reverse the last decades of redistribution of money from the middle class to the wealthy.
After tax and transfers the wealthy do better than before taxes. Our world leading gini index of inequality has proven that the US has a regressive tax system taking more from the middle class than the upper class, especially when including payroll taxes, sales taxes, and local taxes.
It would also be a better country with an economically healthier 99 percent even if the one percent lose half of their wealth.
It would stop and reverse the last decades of redistribution of money from the middle class to the wealthy.
After tax and transfers the wealthy do better than before taxes. Our world leading gini index of inequality has proven that the US has a regressive tax system taking more from the middle class than the upper class, especially when including payroll taxes, sales taxes, and local taxes.
It would also be a better country with an economically healthier 99 percent even if the one percent lose half of their wealth.
6
A zero capital gains tax has no political future. Given that returns to capital have tended higher as globalization has increased, a primary goal should be to tax labor less. This should increase aggregate demand and make for a less fractured political environment.
6
Since he is not running for Senator, if he loses the Presidency, he will lobby for tax breaks for lobbyists since that is the perfect job for him.
2
I have always thought of Capital Gains as income from Lazy Dollars. Income produced from dollars seperate from good old Republican hard work, the sweat of the brow, or the great new idea. The income from capital should be taxed the same as ordinary income. It should also be subject to social security tax. Otherwise it is just another tax break for the wealthy and better off of our society. As to the argument that no one would invest without the capital gains tax break. As long as capital can produce wealth people who have it will invest it in risk averse or risk adventurous enterprises depending on their needs and spirit. Few will chose to leave it idle in a bank or under the mattress. Rubio is a conman, but then what can you expect from a law and order, multi churched, gun loving Republican with a criminal coke dealing brother in law.
6
Double taxation is only a worry if corporations are paying taxes to begin with. In the US, corporations are supposed to pay a tax rate of 35% on their income. But according to a report by Citizens for Tax Justice, the 288 most profitable Fortune 500 companies only paid an average of 19.4% over the last five years. Moreover, 26 of them, including Boeing, General Electric, Priceline.com and Verizon, paid no federal income tax at all. A third of them (93) paid an effective tax rate of less than 10% percent.
I don't know about you, but I've paid Verizon a tidy sum over the last five years for my cell phone service. It's hard for me to believe that this premium provider isn't a very profitable business. And the fact that they pay no taxes at all for the roads they drive on; the federal, state, and local governments that support them; and all the other public services they use is rather galling.
So, double taxation? I'll worry about it when the corporations themselves are paying taxes.
I don't know about you, but I've paid Verizon a tidy sum over the last five years for my cell phone service. It's hard for me to believe that this premium provider isn't a very profitable business. And the fact that they pay no taxes at all for the roads they drive on; the federal, state, and local governments that support them; and all the other public services they use is rather galling.
So, double taxation? I'll worry about it when the corporations themselves are paying taxes.
14
Really? Verizon paid no income taxes in 2014? Have you actually read their 10-K? Probably not:
In 2014, Verizon paid $7.2 billion in taxes. This includes $4.1 billion paid in 2014 for income taxes, $1.3 billion for employment taxes, and $1.8 billion in property and other taxes.
In 2014, Verizon paid $7.2 billion in taxes. This includes $4.1 billion paid in 2014 for income taxes, $1.3 billion for employment taxes, and $1.8 billion in property and other taxes.
1
Hold on... So, reduced tax rates on capital income serve plausible purposes because dividends are distributions of already-taxed corporate profits and are therefore taxed twice? But you're talking about capital gains tax rates here, not dividends. Dividends are not capital gains; dividends are investor returns paid out of corporate profits and have nothing to do with the rise in the value of a corporations stock.
Capital gains occur when an asset increases in value and is sold at a higher price than the price at which it was purchased. That's the idea behind the maxim "buy low and sell high." Buy a stock for a low price, hope that it appreciates, and sell it for a higher price. The profit you make is income, which is called a "capital gain." But it's a dubious claim that it's a kind of income that deserves to be taxed at a lower rate than the income you earn from your own labor. Especially now, when interest rates are low and capital is cheap. Encouraging wealthy people to invest more of their money in capital by offering them lower rates on capital gains is the opposite of what we should be doing. We should be encouraging consumption to create demand for goods and more jobs.
Capital gains occur when an asset increases in value and is sold at a higher price than the price at which it was purchased. That's the idea behind the maxim "buy low and sell high." Buy a stock for a low price, hope that it appreciates, and sell it for a higher price. The profit you make is income, which is called a "capital gain." But it's a dubious claim that it's a kind of income that deserves to be taxed at a lower rate than the income you earn from your own labor. Especially now, when interest rates are low and capital is cheap. Encouraging wealthy people to invest more of their money in capital by offering them lower rates on capital gains is the opposite of what we should be doing. We should be encouraging consumption to create demand for goods and more jobs.
5
One minute the republicans are talking about the deficit and how bad it is for the country, and the next minute they want to eliminate the capital gains tax which would not only increase the debt but also put a lot more $$ into already wealthy hands. For example, 15% of $1M is $150,000, and 15% of $1000 is $150. So the rich guy gets a lot richer and the average working stiff gets a big $150 which buys 1/2 week of groceries, maybe.
7
No mention of how much loss in tax revenue this will cause, or how Rubio will make up the difference. Question: whom would increase the deficit more, Bernie Saunders or any Republican Plutocrat feeder?
5
Barry left out one other justification for a lower rate on capital gains (but not dividends). Much of the "gain" in capital gains is due not to increased purchasing power but to inflation.
If I buy $100 shares of stock and sell it, say, 20 years later for $200, I have a "capital gain" of $100. But if inflation has also doubled the cost of goods in that time frame, the $200 I get for the sale can purchase no more than the $100 I used to purchase the shares. A lower capital gains tax at least partly offsets the effects of inflation.
If I buy $100 shares of stock and sell it, say, 20 years later for $200, I have a "capital gain" of $100. But if inflation has also doubled the cost of goods in that time frame, the $200 I get for the sale can purchase no more than the $100 I used to purchase the shares. A lower capital gains tax at least partly offsets the effects of inflation.
1
Actually I have to say that this (rarely though I've heard it) seems among the most reasonable excuses for a lower capital gains tax.
However, I'd much rather handle this explicitly: people need to keep track of when they buy stocks anyway (for short-term vs. long term), so why not just do a table: you bought the stock in this year, you get to deduct this percentage of the gain as being inflation. Easy enough to do, and even easier with computers. And it's much fairer. Someone who's selling stock bought in 1975 should get a much bigger discount than someone selling a stock bought in 2012.
Note: I wouldn't allow the number to go negative though. If a stock did badly I'm willing to allow no tax to be imposed on it, but not to allow it as a deduction.
However, I'd much rather handle this explicitly: people need to keep track of when they buy stocks anyway (for short-term vs. long term), so why not just do a table: you bought the stock in this year, you get to deduct this percentage of the gain as being inflation. Easy enough to do, and even easier with computers. And it's much fairer. Someone who's selling stock bought in 1975 should get a much bigger discount than someone selling a stock bought in 2012.
Note: I wouldn't allow the number to go negative though. If a stock did badly I'm willing to allow no tax to be imposed on it, but not to allow it as a deduction.
1
There might have been some rational basis for taxing capital gains at a lower rate than wages at one point in our history when capital was scarce. That's clearly no longer the case. Businesses are sitting on wads of cash with nowhere to invest it profitably. They use it instead to finance stock buy backs which adds zero to US productive capacity.
Tax'em. And put the proceeds to good use, building schools, infrastructure, solar panels, etc.
Tax'em. And put the proceeds to good use, building schools, infrastructure, solar panels, etc.
7
Labor - why should there be a tax on labor - physical or intellectual - when humans have a "finite" life span - if they live for 80 years they are luck if they get 40 productive years with compensation.
Capital - compounds "infinitely" since it has unlimited life span.
Shouldn't all taxes be reversed and tax labor lower than capital because of limited productive lifespan of labor and infinite productive compounding of capital?
Capital - compounds "infinitely" since it has unlimited life span.
Shouldn't all taxes be reversed and tax labor lower than capital because of limited productive lifespan of labor and infinite productive compounding of capital?
8
What a great new idea that Rubio has come up with! Watch Wall Street flock to fill his campaign coffers now. I heard major NY donors are lining up already for his coronation. Does he care if such a plan will lead to a bigger recession than the one Bush created with his tax cuts? No - he will be the one laughing at the foolish voters that elected him for a second term by then! Fool me once - if it works, fool me again!
8
Pay attention. The recession was a result of Frank-Dodd, who are (thankfully) no longer in Congress.
Capital gains taxes ought to be reduced for investments that are actual investments and not financial engineered speculation as it currently exists on Wall Street. Examples of investments would be solar, wind, equipment that increases productivity, software enhancement, improved transportation such as smart rail, improved FAA software and hardware, a smart grid, etc.
Yes, some of this public improvement and not private investment but the point is improvement in the means of production that produces "real" wealth and not investments in stock buy backs, dividends, etc. The latter investments ought to be taxed at the same rate as wages.
I would also add that any improvements in productivity need to be structured so that the rewards on return on invested capital be also returned to the workers otherwise we will continue down the same road of wealth and income wealth being transferred to the top 10%, top 1% and top .1%
In short, penalize non-productive capital and reward productive capital.
A 20% tax rate ought to be enough incentive.
Yes, some of this public improvement and not private investment but the point is improvement in the means of production that produces "real" wealth and not investments in stock buy backs, dividends, etc. The latter investments ought to be taxed at the same rate as wages.
I would also add that any improvements in productivity need to be structured so that the rewards on return on invested capital be also returned to the workers otherwise we will continue down the same road of wealth and income wealth being transferred to the top 10%, top 1% and top .1%
In short, penalize non-productive capital and reward productive capital.
A 20% tax rate ought to be enough incentive.
4
Perhaps the Cruz VAT proposal is based on his experience as a Canadian citizen
1
Good news for Hillary. The big message from the Republican primaries is that the conservative base, middle to lower income whites, are sick of pandering to the elite. If Rubio gets the nomination and keeps pushing this 1% agenda, it will keep enthusiasm low among these base republicans who think he is too soft on immigration already. Hillary is going to pound these guys in the Midwest.
The only problem with your assertation is that Hillary panders to the elite as well, just in a more discrete way. (btw, I'm a liberal, not a conservative) She and Obama are the equivalent of GOP lite, in regards to banking & financial interests.
1
"The Economist" have called Rubio's other tax plans "expensive and regressive". One can only imagine how they'll view this latest edition of economic loyalism.
1
Rubio's tax plan is just another sop to the rich who think they shouldn't have to pay any taxes for 'them' - where 'them' are the rest of us whom the rich think are all a bunch of lazy good for nothings.
If the rich really want a 'flat tax' or 'fair tax', then make the first $30k income/person of a tax paying family exempt, then impose a flat rate on the rest above that. And index it for inflation of course. But they'll never do that because so many of the rich pay very little (as a % of their income) in taxes. Yes they pay most of the actual dollars (because they have most of the dollars), but as a % of their wealth/income they pay a small fraction of what you and I pay.
If the rich really want a 'flat tax' or 'fair tax', then make the first $30k income/person of a tax paying family exempt, then impose a flat rate on the rest above that. And index it for inflation of course. But they'll never do that because so many of the rich pay very little (as a % of their income) in taxes. Yes they pay most of the actual dollars (because they have most of the dollars), but as a % of their wealth/income they pay a small fraction of what you and I pay.
2
Let us not forgot that the patriarch of the modern american republican party, one Ronald Reagan proposed (correctly) that capital gains should be taxed a regular income.
The fact is that capital gains may in fact be taxed both at the corporate level, and again as capital gains, but unless you are willing to double the corporate tax, so what? encouraging spending rather than investment is probably the BEST thing the government could do for the working man. Spending leads to jobs. There are plenty of people around the world who have nowhere else but here to invest their money, there will still be plenty of capital even if gains were taxed as income.
The fact is that capital gains may in fact be taxed both at the corporate level, and again as capital gains, but unless you are willing to double the corporate tax, so what? encouraging spending rather than investment is probably the BEST thing the government could do for the working man. Spending leads to jobs. There are plenty of people around the world who have nowhere else but here to invest their money, there will still be plenty of capital even if gains were taxed as income.
11
I have difficulty buying into the idea that capital gains should be taxed at a lower rate than labor. Seems to me the observation evidence Mr. Barro cites destroys rationale number 3. As for number 2, it seems to me that the economy would be better off if people bought and held equities rather than constantly changing them. That would make companies look more to the long term rather than a quarter or two ahead, as often seems the case.
As Paul Krugman points out today, over half of all capital gains go to the richest 0.1%, with less than a third of capital gains going to those of us in the lower 99%. I suspect its no accident that the vast majority of money spent on political campaigns comes from that 1%.
As Paul Krugman points out today, over half of all capital gains go to the richest 0.1%, with less than a third of capital gains going to those of us in the lower 99%. I suspect its no accident that the vast majority of money spent on political campaigns comes from that 1%.
5
Rubio's plan is for the rich. I am sure the dollar shortfall will be made up by the middle class. I believe all income should be taxed the same.
13
As he said - point three is bogus.
But a 4th point - in a better system, where capital gains tax had a progressive feature (as it should) - it would need to be -moderately- lower for the potential multi-year nature of the gain.
Point one, I'm confident is overstated by conservative leaning economists in the very complicated analysis. I'm confident that the best analysis is that product-purchasers and worker-salaries actualize way more of a corporate tax than does investors - or at least larger percentage than Josh implies. But I'm good with a compromise on this point: 1) make corporate taxes *ZERO* 2) up the capital gains rate in general 3) REALLY up the progressivity of capital gains tax.
I'm good with the mentioned effect of point 2 as long as we change some laws to decrease the incentive for corporations to sit on piles of cash and near cash.... Perhaps increase their incentive towards dividending all that cash more than they seem to today.
But a 4th point - in a better system, where capital gains tax had a progressive feature (as it should) - it would need to be -moderately- lower for the potential multi-year nature of the gain.
Point one, I'm confident is overstated by conservative leaning economists in the very complicated analysis. I'm confident that the best analysis is that product-purchasers and worker-salaries actualize way more of a corporate tax than does investors - or at least larger percentage than Josh implies. But I'm good with a compromise on this point: 1) make corporate taxes *ZERO* 2) up the capital gains rate in general 3) REALLY up the progressivity of capital gains tax.
I'm good with the mentioned effect of point 2 as long as we change some laws to decrease the incentive for corporations to sit on piles of cash and near cash.... Perhaps increase their incentive towards dividending all that cash more than they seem to today.
1
How about a simple trade off. Eliminate both the corporate income tax and the death tax and offset that with ordinary income for both dividends and capital gains. That would make everything simpler, eliminate a lot of costs for both corporations and the government. I have no idea on what that would do to tax revenues, but it might eliminate all these inversions or reverse them.
3
The vast majority of estates — 99.9% — do not pay federal estate taxes. While the top estate tax rate is 40%, the average tax rate paid is just 17%. The estate tax is only paid on assets greater than $5.3 million per individual. There are also protections for farms and family businesses.
Are you then saying that Todd and Muffy should pay zero on unearned income because they were wise enough to choose the right parents?
Are you then saying that Todd and Muffy should pay zero on unearned income because they were wise enough to choose the right parents?
1
Buying votes with "Free Money."
Selling out our future.
This guy has a spot in our new relationship with Cuba.
Send him back ASAP.
He's killing America.
Selling out our future.
This guy has a spot in our new relationship with Cuba.
Send him back ASAP.
He's killing America.
6
An interesting case of cherry picking. Republicans are comfortable with the absurdity of considering corporations as legal entities, even as person with the right to have opinions, however, they forget about this convenient "personalization" when it comes to paying taxes. They don't want corporations to pay taxes because they maintain that the money is taxed at this level and then again at the personal level. The question is: if corporations have the same rights as real people, why shouldn't they pay taxes like real people?
17
Your ideas are incorrect, how about not taxing corporations at all and taxing their dividends as ordinary income. With more cash owners would insist on more returns of some sort. Tax the capital gains as well as ordinary income.
2
what a (not) surprise! he sucks up to IA evangelicals and pulls one state out of somewhere dark and next thing you know he's on his knees (but not prying like cruz) looking for "mainstream". attention! anyone with an IQ over a turnip!! THIS is exactly why the guy's gotta go. its people who support bernie and trump (later also for other reasons) that he diametric opposite. want to restore the tax code even closer back to 1700's england? elect this clown.....
1
Krugman posted a blog entry on how top 0.1% earners would love Rubio's plan: http://krugman.blogs.nytimes.com/2016/02/04/rubio-for-the-rich/
2
Oh wait, this is Rubio's idea of fairness? The Kid just made a Rookie mistake and Bernie & Hillary will just have a party with this IF he gets the nomination.
I bet he flip-flops pretty quickly on this just like he did with Immigration reform. What has Rubio accomplished in his political career? Nothing, but he sure did miss a lot of votes!
I bet he flip-flops pretty quickly on this just like he did with Immigration reform. What has Rubio accomplished in his political career? Nothing, but he sure did miss a lot of votes!
5
The double taxation argument is seriously flawed.
If I, as an individual have income, on which I pay tax, then hire another person and pay them, they are taxed again. Why isn't that called double taxation?
Corporations are recognized as entities and therefore given certain rights, including free speech. When they give dividends to another entity (in this case an individual) the second entity is taxed. But why is this tax rate lower than the case of individuals? Our system is inherently unfair if corporate entities are treated preferentially to people. We reward people who do not work at the expense of people who do work.
If I, as an individual have income, on which I pay tax, then hire another person and pay them, they are taxed again. Why isn't that called double taxation?
Corporations are recognized as entities and therefore given certain rights, including free speech. When they give dividends to another entity (in this case an individual) the second entity is taxed. But why is this tax rate lower than the case of individuals? Our system is inherently unfair if corporate entities are treated preferentially to people. We reward people who do not work at the expense of people who do work.
7
willeyb - your analogy is flawed.
A corporation, as a business entity, is entitled to deduct just about all business expenses - so if they hired someone and paid them, the recipient would recognize income (and presumably pay tax on it), but the company, by getting a deduction, would essentially NOT pay tax on that income. Dividends, on the other hand, are not deductible - so double tax would result. Paying a dividend can be more similar to one individual giving a gift to another individual - in that case, there is no taxable income to the recipient, but also no deduction to the giver.
This is not to say that Rubio's proposal is a good one. As a policy matter, there can be justification for such double taxation; however, at least one should understand the internal logic of his position is key to having an intelligent debate.
Nick
A corporation, as a business entity, is entitled to deduct just about all business expenses - so if they hired someone and paid them, the recipient would recognize income (and presumably pay tax on it), but the company, by getting a deduction, would essentially NOT pay tax on that income. Dividends, on the other hand, are not deductible - so double tax would result. Paying a dividend can be more similar to one individual giving a gift to another individual - in that case, there is no taxable income to the recipient, but also no deduction to the giver.
This is not to say that Rubio's proposal is a good one. As a policy matter, there can be justification for such double taxation; however, at least one should understand the internal logic of his position is key to having an intelligent debate.
Nick
3
Your logic is flawed since in one instance services were required, the other only an investment. Large difference.
Please - look at Kansas as an example of what cutting taxes on business *doesn't* do for the economy. Governor Brownback cut taxes on businesses over a year ago, since then, Kansas has plunged into deep debt causing huge cuts to education, social services (DCF for one), and the Kansas Highway Patrol is short 75 troopers. He also raised the sales tax, putting Kansas near the top for the nation. Residents near the border, and by 'near' I man within 100 miles, or half the state in some cases, drive to neighboring states to purchase groceries because the difference in taxes is worth the drive.
Brownback has changed revenue estimates so things wouldn't look as bad, yet the state is still missing monthly estimates by $7 to 13 million per month. He changed the law so he could 'borrow' $400 million from KDOT, yet Kansas is projected to still have a $600 million shortfall this year.
Business tax cuts don't work. There is no trickle down. Businesses don't hire employees if they don't need them, regardless of tax cuts. It's just more profit for the business owner, and the burden is placed on the consumer, especially those at the bottom.
Brownback has changed revenue estimates so things wouldn't look as bad, yet the state is still missing monthly estimates by $7 to 13 million per month. He changed the law so he could 'borrow' $400 million from KDOT, yet Kansas is projected to still have a $600 million shortfall this year.
Business tax cuts don't work. There is no trickle down. Businesses don't hire employees if they don't need them, regardless of tax cuts. It's just more profit for the business owner, and the burden is placed on the consumer, especially those at the bottom.
25
Conservative voters don't care about the consequences, as long as an idea sounds good to them. They did reelect Brown after all.
2
Fantastic piece!
Another major class of beneficiaries of the Rubio plan not mentioned would be corporate executives who derive much of their income for stock options, which are taxed at capital gains rates. If this type of compensation becomes tax-free, many CEOs will see their overall federal tax rate drop into the low single digits. Ditto for hedge fund managers via the carried carried-interest loophole.
Another major class of beneficiaries of the Rubio plan not mentioned would be corporate executives who derive much of their income for stock options, which are taxed at capital gains rates. If this type of compensation becomes tax-free, many CEOs will see their overall federal tax rate drop into the low single digits. Ditto for hedge fund managers via the carried carried-interest loophole.
9
At least we are seeing some Royalists admit to a need for taxes to balance the budget. The only question is what type of tax. The reason the Bush tax cuts did not generate growth is because the Royalists don't put their money back into society, they hoard it in various accounts and take it out of circulation. Capital gains taxes of 25% seem reasonable, but we also need stock transaction taxes, VAT, and increase fuel taxes to discourage gambling, unnecessary consumption, and build infrastructure. Feel the Bern.
3
Capital gains need to be taxed. Period. However, there needs to be a clear distinction between the folks who worked all their lives to put aside a medium sized nest egg that they could live on when they retired, and the billionaires (and multi-millionaires) who have lived off of capital all their lives (and their families have lived off of the capital for generations).
When one says "tax the millionaires", we need to distinguish between those who earn a million dollars a year and those that have labored all their lives to put together a million dollars in assets to live off of in retirement.
We should tax capital gains, distributions and interest earned over a minimum threshold but not tax (or at least have reduced tax rates) for those who earn less each year from those investments.
Similarly, there is no reason to have a cap on contributions to Social Security. Right now, labor income over a certain amount is not subject to Social Security contributions. Making this one change - removing the income contribution cap - would go a long way, if not solve outright, the Social Security problem.
When one says "tax the millionaires", we need to distinguish between those who earn a million dollars a year and those that have labored all their lives to put together a million dollars in assets to live off of in retirement.
We should tax capital gains, distributions and interest earned over a minimum threshold but not tax (or at least have reduced tax rates) for those who earn less each year from those investments.
Similarly, there is no reason to have a cap on contributions to Social Security. Right now, labor income over a certain amount is not subject to Social Security contributions. Making this one change - removing the income contribution cap - would go a long way, if not solve outright, the Social Security problem.
7
Inkblot - if the cap were removed with respect to Social Security contributions, would you also support removing the cap from Social Security benefits? After all, the two are linked - Social Security was designed as forced savings, rather than a true tax - that's why there's a Social Security trust fund. The fact that the government is not very good (or is deliberately bad) at managing a retirement plan is the reason for the shortfall.
Nick
Nick
1
"a rise in a stock price represents a rise in expected future taxable corporate profits." This statement is incomplete to the point it must be considered to be untrue. There are many reasons for a rise in asset prices, expected future earnings being only one minor reason. The internet era is replete with companies reaching stratospheric prices based on expectations of growth, which isn't taxable. Stock prices react to perceptions of safety or risk in times of stress. They reflect the spread between treasury yields and dividends. Some capital gains are earned on derivatives, which are only indirectly related to earnings. And then there is carried interest, which isn't even a true capital gain, but rather pay for (unrealized) performance. Some capital gains are earned on asset sales, such as sales of real estate. And so on. While your vague generality makes the concept sound neat and complete, it's neither.
3
Fact is that many if not most of the very wealthy derive most of their income from Capital Gains. It is why Warren Buffet's effective tax rate is less than his secretary. Furthermore, the Corporate tax rate is so high that it has encouraged companies to leave the US. So if one reason for low Capital Gains is because of the double taxation, then why not drop the corporate rate dramatically...or even consider eliminating it... while taxing Capital Gains as ordinary wages? Those retirees who make lower incomes would not be hit hard when they remove money from their retirement accounts, but unless the very wealthy are willing to live like ordinary people, they are going to have to take some of those gains just to maintain their lifestyle.
This is what a so-called "moderate" Republican candidate looks like today. I can understand proposing complete reform of the corporate tax rate, which presumably would stop the flow of "inversions", and the accompanying loss of jobs and growth. But this capital gains handout cannot be defended as growth-promoting, or defended on a societal level at all. Even the last "fiscal conservatives" we had wouldn't dare such a proposal. But like them, Marco is quite similarly hawkish. Reasonable people would be remiss not to expect him to "socialize" costs of war that could tally well into the trillions of dollars ($7 trillion for Iraq and Afganistan) -- which of course will not be paid for through capital gains taxes, but by working people through payroll and income tax -- the same "class" of people that, at his behest, will suffer 20% rates of PTSD and do all of the dying.
3
We all know that the donors to Rubio's electoral putsch are, amongst others, the Adelmans, and the Kochs. And, these poobahs draw their monetized succor off of the backs of wage earners who give back to the government something in the realm of 25+% of their income. Not so capital gains taxation that favors the "upperclass", who already pay-up 13-% of their gifted status along with the inevitable write-offs which shrink that obligation to zero. To add insult to injury, now, the further insult to wage earners would be a guaranteed hail mary of sequestered wealth rocketed to their overseas accounts.
When will Americans take notice of the tax boondoggles that ultimately reduces their well being and vote in their very own interests?
What will it be, America?
When will Americans take notice of the tax boondoggles that ultimately reduces their well being and vote in their very own interests?
What will it be, America?
10
So, Earl cable installer shows up at your house, regardless of weather, puts in cables, hooks up your tv, on and on, and pays Medicare, FICA, local, state, and federal taxes. Ernie the Investor--whose money is too holy to contribute to the common good--sits at home, clips coupons, or sells Boeing at a profit. No Medicare. No FICA. Maybe some local and state, but no federal. Why don't we just put those folks in their own cathedral, where we can worship them? Or, along the same lines, let's just call them the Morlocks, and we can all be the Eloi.
8
A 0% corporate income tax with a 15% flat corporate payroll tax would do what? Corporations World-WIDE, would want to do business HERE...in good ole SAFE USA! New corporate headquarters going up in every city ...CONSTRUCTION BOOM! Unemployment down, tax revenues UP, less welfare cost....with the added dollars to shore up SS/MC! Corporations no longer would need to do taxes or hide offshore....BUMMER, for corporate lawyers & accounting firms! To redeem some of those lost tax dollars, tax money when transferred to an individual. End capital gains, & tax all transfer of wealth to individuals as income tax, with some rules like the first $500,000.00 - $1,000,000.00 inherited exempt.
1
Are you sure about your plan? You ran the numbers I assume?
1
Nope. It doesn't work. States have tried that, and it just doesn't happen.
2
if only it really worked. the results don't materialize when governments have reduced taxes in the manner you suggest. Why is the real life experience so frequently ignored by you and others in advancing the concept? I say that because the concept sounds great...almost too good to be true. And ya know what they say when something is too good to be true!!
"First, a large fraction of capital income is taxed twice, at the corporate and individual levels. Dividends are distributions of already-taxed corporate profits, while a rise in a stock price represents a rise in expected future taxable corporate profits."
We have been hearing this for decades. But the premise is false. Corporations pay dividends out of their revenue. Even when a corporation loses money, it can choose to and often does continues it dividend. That is a choice made by the company's board. So dividends are not coming from "already taxed" profits. What else does a corporation pay out of revenue? Wages. Which are also paid whether the company has profits or not. So by the logic expressed here, wages should not be taxable or should be taxed at a lower rate than ? wages ?
Plus the article only hints at this, but a lot of capital gains don't come from dividends. They come from the sale of appreciated assets (e.g. stock). That is wealth that has been created and has never been taxed.
So let's bury this part of the argument for lower (or zero) tax rates on capital gains. It is not believable.
We have been hearing this for decades. But the premise is false. Corporations pay dividends out of their revenue. Even when a corporation loses money, it can choose to and often does continues it dividend. That is a choice made by the company's board. So dividends are not coming from "already taxed" profits. What else does a corporation pay out of revenue? Wages. Which are also paid whether the company has profits or not. So by the logic expressed here, wages should not be taxable or should be taxed at a lower rate than ? wages ?
Plus the article only hints at this, but a lot of capital gains don't come from dividends. They come from the sale of appreciated assets (e.g. stock). That is wealth that has been created and has never been taxed.
So let's bury this part of the argument for lower (or zero) tax rates on capital gains. It is not believable.
10
Dividends paid in loss years absolutely ARE paid out of earnings - just not earnings from the current year. Under US tax law, in order for an amount to be considered (and taxed as) a dividend, it has to be paid out of "Current or accumulated earnings and profits". Absent the existence of such earnings and profits, corporate distributions are, by definition, not dividends - they're a return of capital or a capital gain.
Nick
Nick
Why in the world would Rubio call for this? Is he now pandering to the wealthy establishment?
When he panders to one group, he alienates other groups. When he panders to everybody, as Rubio seems to be trying to do now, he alienates everybody. This guy is either brilliant (unlikely) or is heading for a fall (almost certainly).
When he panders to one group, he alienates other groups. When he panders to everybody, as Rubio seems to be trying to do now, he alienates everybody. This guy is either brilliant (unlikely) or is heading for a fall (almost certainly).
3
The Rubio plan more money for me and my rich friends increased taxes for the middle class.
5
DO some believe it matters to the poor there be a capital gains rate lower? Some one who earns $40K a year paying 15% income tax, is not worried about a paying a 20% capital gains tax! What they do see, is Billionaires who's income is mainly dividends & interest, paying 20% capital gains tax on that, rather than the 39.5% income tax! So they see a $1 billion a year income, paying $200 million instead of $395 million, & wonder if they really need the extra $195 million to live on?
Any plan that does not tax capital gains and carried interest as ordinary income is a total giveaway to the wealthy and will further increase inequality
Income is income and my salary is just as hard earned as your gain.
Corporations downsize workers each year to meet eps or dividend needs. Then we reward investors for layoffs and offshoring jobs with lower tax rates. There should be a big fat tax for that.
Income is income and my salary is just as hard earned as your gain.
Corporations downsize workers each year to meet eps or dividend needs. Then we reward investors for layoffs and offshoring jobs with lower tax rates. There should be a big fat tax for that.
12
There's one reason to differentiate capital gains from earned income such as labor income or dividends in our tax scheme: the effect of inflation.
If my family bought a nice piece of investment property, say a few acres of land, for $100,000 in 1970, and we've kept it since, it's value has appreciated a great deal. Today, using the CPI calculator, it's worth $610,000. So if mom and dad decide to sell in order to finance their move to a retirement community, they'll owe tax on $510,000 of capital gains, which at the 23.8% rate adds up to quite a bit.
In this day and age of computing power, one solution would be to tax capital gains as income, _adjusted for inflation_ (say on a integer number of years since purchase). That way, real gains are indeed taxed as they should be, but inflation-adjustments are not.
If my family bought a nice piece of investment property, say a few acres of land, for $100,000 in 1970, and we've kept it since, it's value has appreciated a great deal. Today, using the CPI calculator, it's worth $610,000. So if mom and dad decide to sell in order to finance their move to a retirement community, they'll owe tax on $510,000 of capital gains, which at the 23.8% rate adds up to quite a bit.
In this day and age of computing power, one solution would be to tax capital gains as income, _adjusted for inflation_ (say on a integer number of years since purchase). That way, real gains are indeed taxed as they should be, but inflation-adjustments are not.
4
There is a second reason in addition to PQuincy's, which is that when you go to your job, you know you're getting paid.
An investor can lose money on his investment; you can't lose money going to your job.
Now, is that a distinction worth making in the tax code? Well, that's for reasonable people to debate. However, there are many countries other than the US where capital gains are taxed favorably as compared to earned income (or not at all) -- and many of those countries are considerably more "progressive" than the US. For example, our friendly neighbors to the north, Canada, home of single-payer health care, gay marriage way before we recognized it here, and considerably more protection for workers in their labor laws, taxes capital gains at 1/2 of one's ordinary income rate.
So this isn't just an idea of the Koch brothers, or US right-wingers. Reasonable people may disagree on whether it's appropriate, but let's be sure we understand that it isn't unique.
An investor can lose money on his investment; you can't lose money going to your job.
Now, is that a distinction worth making in the tax code? Well, that's for reasonable people to debate. However, there are many countries other than the US where capital gains are taxed favorably as compared to earned income (or not at all) -- and many of those countries are considerably more "progressive" than the US. For example, our friendly neighbors to the north, Canada, home of single-payer health care, gay marriage way before we recognized it here, and considerably more protection for workers in their labor laws, taxes capital gains at 1/2 of one's ordinary income rate.
So this isn't just an idea of the Koch brothers, or US right-wingers. Reasonable people may disagree on whether it's appropriate, but let's be sure we understand that it isn't unique.
3
PQuincy, so your claim is that your parents should pay zero taxes on their house sale because after adjusting for inflation the values are the same. Can I get the same deal for my wages? After all, for a lot of people the amount of dollars they get paid now is basically a loss (after adjusting for inflation) from what they were paid at the start of their careers.
This goes to Kevin's point as well. Every year I don't get a raise is a year that I'm losing money to inflation. All the people who are still under-employed are losing tons of money that they would have been paid if the economy were stronger.
Having a job doesn't have to be conceptually different from investing. But, if they're not different, the case for special privileges goes away.
This goes to Kevin's point as well. Every year I don't get a raise is a year that I'm losing money to inflation. All the people who are still under-employed are losing tons of money that they would have been paid if the economy were stronger.
Having a job doesn't have to be conceptually different from investing. But, if they're not different, the case for special privileges goes away.
2
These cuts would be acceptable only if coupled with a property tax on all forms of property that contributes to ones wealth. Property that would include stocks, land, buildings, yachts, jewelry, art, and so on. This would allow people to earn and gain wealth at their highest capacity while contributing to our society through this property tax in the same proportion.
Originally property taxes on land functioned in this manner when almost all wealth was measured in land. Obviously this is no longer the case, therefore our concept of property now needs to be more inclusive in fairness.
Originally property taxes on land functioned in this manner when almost all wealth was measured in land. Obviously this is no longer the case, therefore our concept of property now needs to be more inclusive in fairness.
1
We could go to a different tax for the stock market. How about a transaction fee for every time stocks are traded? $5 per trade. Then also no tax at all on capital gains until the capital gains + income are greater than $250k. That way the little guy does not have to pay the burden. Make the capital gain tax be something like %10.
2
There should be no capital gains tax, as all income should be taxed as income. There should be no corporate income tax, as income should be taxed when it leaves the corporate funds in payments to individuals....be it, salary, stock options, or any method of wealth transfer to an individual. Those opposed to this, would be the greedy corporate lawyers!
And yet in Indiana, the blue-collar workers who have seen their jobs disappear still want to vote for the GOP and the candidates like Mr. Rubio who say they are for the "middle class" when really the only people their financial policies benefit are the 0.1%.
If you will excuse me, I think I am going to resign from my job and start day-trading and make some tax fee money. Thanks Marco!
If you will excuse me, I think I am going to resign from my job and start day-trading and make some tax fee money. Thanks Marco!
4
If Tax cuts were a receipt for success, G.W Bush would have been a very successful president. Now Rubio wants to even cut more while increasing military spending and fighting new wars in the Middle East.
Why are Trump and Cruz called "Extremist" and Rubio , "Moderate?
Why are Trump and Cruz called "Extremist" and Rubio , "Moderate?
4
Gosh, just what the country needs, less taxes for the trust fund crowd. How about this. We lower taxes on people who actually work and try to save thier money? I know, it's nuts. After all,every tax cut for the fat cats has worked perfectly for the economy and the rest of us.
During the last election mr hope and change and mitt the millionaire both released thier taxes that said they paid ~15%. I make many times less than they do and I pay 30 %.
Frankly, I'm ready to see the rates of those liberal firebrands like Eisenhower or even Reagan come back.
To even talk of cutting more taxes for the top while the middle class withers away doing the heavy lifting is insanity.
I'll be looking seriously at anybody who will stand up to the Wall Street crooks and at least talk about leveling the tax playing field.
During the last election mr hope and change and mitt the millionaire both released thier taxes that said they paid ~15%. I make many times less than they do and I pay 30 %.
Frankly, I'm ready to see the rates of those liberal firebrands like Eisenhower or even Reagan come back.
To even talk of cutting more taxes for the top while the middle class withers away doing the heavy lifting is insanity.
I'll be looking seriously at anybody who will stand up to the Wall Street crooks and at least talk about leveling the tax playing field.
4
I agree there should be no capital gains tax....the bracket should not even exist, as all income should be taxed as income...no matter where it is derived. If the Walton's make $1 billion each a year from dividends & interest...then tax it all at the 39.5% income tax...& not some made up special rate called capital gains!
4
"When Mr. Romney was the Republican nominee in 2012, he proposed to abolish the capital gains tax for moderate earners — who typically have few capital gains anyway — but not for the Kennedys, Rockefellers and Forbeses, who would have continued paying 15 percent."
Um, and Romneys.
Though, as it turned out, and when Mitt Romney was finally pressured to reveal at least some of his income tax returns, he was coming in as just a bit south of 15% anyway.
Smillions, not to mention $billions, can buy you a lot of legal time to troll for loopholes to bring you in under the rate of your secretary and black sheep brother anyway.
Um, and Romneys.
Though, as it turned out, and when Mitt Romney was finally pressured to reveal at least some of his income tax returns, he was coming in as just a bit south of 15% anyway.
Smillions, not to mention $billions, can buy you a lot of legal time to troll for loopholes to bring you in under the rate of your secretary and black sheep brother anyway.
Studies have proven conclusively that there is no correlation between capital gains rates and economic growth or job creation. Approximately 50% of all capital gains in taxable accounts are received by the top 0.01% of households in the USA. Yes, the top 1/10th of the top 1%. In addition, capital gains in 401k and IRA accounts are not taxable, and in taxable accounts are not taxable until one earns 250k a year for a couple filing jointly. So cuts in capital gains taxes have virtually no benefit for the vast majority of Americans.
Thus, a call for elimination of taxes on capital gains is a sop to the ultra wealthy for the most part, without any real economic justification. It is all talking points and bowing to one's billionaire benefactors. Rubio's proposal is simply a fraud.
Thus, a call for elimination of taxes on capital gains is a sop to the ultra wealthy for the most part, without any real economic justification. It is all talking points and bowing to one's billionaire benefactors. Rubio's proposal is simply a fraud.
7
I buy your basic premise.. but there are inaccuracies in your argument.
1) Top 1/10th of 1% is still 0.1% and not 0.01%. Which is it?
2) You say there are no capital gains taxes in the taxable account until one earns 250k/year for a couple jointly. That is plain wrong -- I should know I am in that category. The 10% rate kicks in around $75K and steps up to 15% after that. $75 of taxable income is definitely not in the stratosphere -- especially so if you look at the set of people who pay non-zero taxes.
Although I will benefit, I am not in favor zero taxes on cap gains. I think the existing zero bracket does an adequate job of people like me save some for the future without putting us in straight jacket while rebalancing the portfolio.
Pardon, the top 1/100 of the top 1%. That's a pretty thin upper crust that would get most of the benefits of such a cut.
You are correct on both counts, 15% long term rate starts at $75,000 of taxable income until it rises to 20% for couples with over $466,950 in taxable income. I also had one too many zeroes in the top 1/10th of 1%. I blew it!
However, the vast majority of the middle class earn capital gains in non-taxable accounts if they earn them at all. The vast majority of Americans report no capital gains at all, only some interest or dividends.
A zero capital gains rate assures billionaires who garner the overwhelming majority of their income in the form of capital gains of paying very little taxes. The proposal is a targeted one benefitting Rubio's true constituents.
However, the vast majority of the middle class earn capital gains in non-taxable accounts if they earn them at all. The vast majority of Americans report no capital gains at all, only some interest or dividends.
A zero capital gains rate assures billionaires who garner the overwhelming majority of their income in the form of capital gains of paying very little taxes. The proposal is a targeted one benefitting Rubio's true constituents.
2
I wish the media would stop referring to Rubio as "mainstream." His positions on most social issues are nearly as far to the right as Cruz, and now he's advocating an extremist idea for eliminating taxes on unearned income - a change which will almost exclusively benefit the wealthiest Americans. Mainstream indeed!
27
Exactly, Tom, he's a rabid right winger whose ideas are decades old.
2
Regrettably, Rubio IS mainstream GOP circa 2016. The whole freakin' party is extreme, making Goldwater look like a center-left moderate and Nixon somewhere to the left of the socialist from Vermont, aka next POTUS.
Capital gains should be taxed, but I do think it would make sense to index the basis for inflation.
4
If everyone's tax were based on an indexed for inflation scheme, that might make sense, but that's not the real world, is it?
Advocates like Mr. Rubio claim that eliminating capital gains taxes, etc., will boost economic growth. I raise contrary arguments. First, history shows that again and again, investment money and loans have flooded into what initially looked like profitable opportunities that ended in losses for investors and lenders, and production overcapacity. This happened with railroads in the 1800s, and I.T. around 2000. And it apparently has happened again with shale oil investments. Second, the key factor on whether a business will opt to expand production capacity is expected demand, not tax rates. But the facts never seem to matter to these advocates.
1
No capital gains tax. What an idea! Even better than the Reagan and GW Bush tax rates. Could it be that Marco is going for the support of Big Money campaign donors who have been holding back while waiting to see how the Republican candidates' policies sort out? It would be a nice accommodation to the "job creators," the One Percenters who don't and never will "Feel the Burn" and are ready to fight Hillary and Bernie all the way to the bank.
3
These people like this author who spout the nonsense that without a lower capital gains tax the rich would stop investing is just stupid. What are they going to do, put it under the mattress. Oh wait, they can send it overseas to invest in some other country? Fine, still tax it! Or don't allow the profits from the overseas investment to be brought back to this country. Or do something else to cost the rich when they send money made here somewhere else. The rich have got the game fixed and have benefited too long at the troth of public assistance. Let them pay their fair share now.
3
Perhaps you can explain, then, why even a progressive country like Canada, with single-payer health care and gay marriage way before we had it and all sorts of protections for the common worker, taxes capital gains at half the taxpayer's ordinary income rate? Certainly Canadians have not been equally duped by their version of the 1%.
1
Same as reg income! Zero would be suicide for the country. The 1%, capital gains is there PRIMARY income, then they would be at zero... Yeah super fair.
3
Rubio doesn't break with the G.O.P. tradition of proposing completely unfunded tax proposals (his own is some $6trillion in the red after 10 years) nor the policy giving most of the benefits to the wealthy. Like every other Republican candidate, he appears to be living in cloud-cuckoo land.
2
This is just another example of Rubio's reckless ideas. Clearly, this man (boy) is not qualified to be president of the United States. He is as craven and cynical a man who has ever run for this office.
4
An underlying assumption of this article is that taxes are bad "Capital taxes are therefore more damaging to the economy than wage taxes". Taxes that are too high (over 50%) MAY be bad for the economy as a whole but I don't know of any definitive proof of this. It is however indisputable that too low taxes is bad for the economy, see "tragedy of the commons".
2
Does anyone at all believe that Rubio actually understands any of this?
He's just parroting the plan that was written for him by his wealthy donors. He's proven throughout this campaign season that is all he is capable of doing.
He's just parroting the plan that was written for him by his wealthy donors. He's proven throughout this campaign season that is all he is capable of doing.
12
Both Hilary and Rubio are funded by Wall Street interests and both will work for them. Each will throw some scraps to their party constituents and supporters. To this day, hedge fund managers pay the least income tax through their "carried" interest route. The AMT also affects only those in the $150k to maximum $500k or so. It does not hit as many earning above $1 million, because the percentage of deductions compared to the salary is much smaller as incomes increase. I must admire Rubio though, he has a gift of the gab. He pulled off a victory speech when he came third. He speaks exactly opposite of his position and in the debates those running it are unable to catch him as he cunningly ducks a question or answers something different with a poker face.
3
Tax gross revenue and/or gross income for individuals and businesses.
Tax all forms of income and all revenue streams the same.
Eliminate all deductions and loopholes for individuals and business.
In short...Tax the Top-line.
The net rate (what is actually paid) would be lower than today, however it would be transparent, simple, and most of all fair.
The rate would of course be on a curve with the "wealthy" paying more and the "poor" paying less.
Today the final net % rate both individuals and corporations pay is based only on how good their tax attorneys and lobbyists are.
Tax all forms of income and all revenue streams the same.
Eliminate all deductions and loopholes for individuals and business.
In short...Tax the Top-line.
The net rate (what is actually paid) would be lower than today, however it would be transparent, simple, and most of all fair.
The rate would of course be on a curve with the "wealthy" paying more and the "poor" paying less.
Today the final net % rate both individuals and corporations pay is based only on how good their tax attorneys and lobbyists are.
5
Taxes are meant to raise money. You can't get any from those who don't have it. Every means of taxation can be argued for and against. Is taxing someone's work more fair than the earnings from sitting around and doing nothing? There are some arguments each way. Years ago, the first $400 in interest and/or dividends was exempt, The rest was taxes and normal rates. They should revive that approach, but with higher limits, maybe as much as $5k. Capital gains could be added as well. Give everyone a chance to benefit, while not coddling those with inherited wealth, but otherwise not productive.
3
What about the inflation problem?
If I bought a stock for $100 36 years ago, and I sell it for $400 today, I pay tax on $300. But if inflation ran at 4% during this period, then by the rule of 72, my $100 should've doubled every 18 years... so my $100 36 years ago is worth $400 today. I actually didn't "gain" anything, but I'm taxed on 3/4 of what my stock is worth.
If I bought a stock for $100 36 years ago, and I sell it for $400 today, I pay tax on $300. But if inflation ran at 4% during this period, then by the rule of 72, my $100 should've doubled every 18 years... so my $100 36 years ago is worth $400 today. I actually didn't "gain" anything, but I'm taxed on 3/4 of what my stock is worth.
5
The rationale that lower taxes on capital gains is necessary to spur investment seems more than a bit outdated. The last decade has seen a surplus of capital (including all that boomer retirement money) chasing around the globe looking for a decent return on investment. As that money exits markets, as with the developing economies right now, economic hardship follows. There's a ton of capital out there looking for a decent home. Why does our tax policy still act like there is a shortfall of available capital that needs to be encouraged to enter markets through tax breaks? It should be obvious by now that what the economy suffers from is more a lack of demand, which is tied to decreasing real wage levels among the laboring class. It would seem that enlightened tax policy would be calling for lower taxes on wage income and higher taxes on capital gains. Not to mention the raw deal wage income gets vs. capital gains income in paying payroll taxes like the Medicare tax, while no such taxes are levied on cap gains.
18
Great!
1
Re: your last sentence -- well, no one ever earned a Social Security check based on their capital gains income either, so I'm not sure what the problem is.
1
Everyone gets Medicare. And if cap gains income was brought under the Social Security umbrella people could get Social Security based on that income also.
Has no one read Capitalism in the 21st Century in which Piketty convincingly proves that Capitalism under normal circumstances always creates the top 1% owning 50% of total wealth? The brief exception in the mid-20th century was due to the vast destruction of capital caused by WW I and II and the Great Depression. Why is no one talking about a graduated annual wealth tax which Piketty proposes to cure this real economic problem?
12
Thank you. That is an excellent point, and one i would not have thought of.
1
A lot of people don't believe Piketty convincingly proved anything.
1
If Piketty is right, people will learn the hard way if not the easy way.
Unfortunately, the "fairness" argument re double taxation is undercut by the public policy argument that unlimited trading, unimpeded by any tax consequences, discourages long term investing and incentivizes day trading.
Surely, there are data linking changes in tax rates to investor trading volume? To mitigate the probable negative impact of further reductions in capital gains tax rates, a transaction tax (at the very least) could serve as a governor on "free-for-all" trading and protect individual investors from themselves and others.
To suggest that "freeing up more investment capital" would boost the economy and help EVERYone is simply a subheading of the empirically discredited "trickle down economics" myth. (I can't bring myself to call it a theory.) Can we please give it a final burial sans eulogy?
Surely, there are data linking changes in tax rates to investor trading volume? To mitigate the probable negative impact of further reductions in capital gains tax rates, a transaction tax (at the very least) could serve as a governor on "free-for-all" trading and protect individual investors from themselves and others.
To suggest that "freeing up more investment capital" would boost the economy and help EVERYone is simply a subheading of the empirically discredited "trickle down economics" myth. (I can't bring myself to call it a theory.) Can we please give it a final burial sans eulogy?
5
Capital gains tax treatment should be reserved for original issue stock, new real estate development, etc. not applied to secondary market transactions whose only economic value added is allegedly liquidity. If the major argument for a capital gains tax is to finance innovation and new investment, then it should be restricted to NEW investment.
1
It's also worth pointing out that contrary to conventional wisdom, taxing capital gains income as regular income would actually result in a lower tax rate for most retirees as they simply don't have enough income to reach higher tax brackets.
2
As an average citizen I sit by and laugh, not because what Mark Rubio proposes for investment income but at the fact that ordinary people like do not seem to get it. Mark Rubio's proposal is nothing but pure payback to the people who support him. Mark Rubio does not care about the common citizen like me. He uses excuse like lower the tax rate on the rich will spur investment or will spur more money going into the economy. The question should be will it and how will the Government make up for the loss in revenue. The first answer is that why would a successful rich person who is already making loads of money from his/her investments stop because the tax rates are high. They have not done so at this point and as the article states the rates were raised in 2013. Secondly where would this loss of revenue be made up, well that is simple its us average citizens who will bare the brunt of the revenue burden. It may be in the loss of public sector jobs because budgets would need to be slashed to make up for the loss of revenue or in the form of tax increases. In any case he is wrong.
5
A reasonable political and economic compromise on capital gains income would be a 20% tax below some threshold - say $200k/year - and taxation at the nominal personal tax rate for all income above the threshold. And the personal tax rates on high incomes need to be much higher than they are now. Tax rate progressivity needs to be increased.
1
Mr Barro should have noted that under Ronald Reagan, capital gains were taxed at the same rate as ordinary income. For some reason, I've never heard a GOP candidate suggest that growth was abnormally slow under President Reagan. I can see taxing capital gains averaged over the term of the gain, however real world data is pretty compelling that the only part of the economy that grows with preferential tax treatment is the tax avoidance industry.
1
Given the tax breaks given to the top class these last 30 years, we should have the greatest most robust economy in the entire world. All that capital should have trickled down to us the worker bees.
Well this worker bee, single, no children, no home mortgage deduction, pays a very high % of my income annually into this rigged for the weathly system.
And then my income is taxed again, by the state, when I spend it sales tax, taxes and surcharges when I pay all my service bills. The same income taxed again and again and again. At least I missed out on paying City taxes, since I don't live in NYC.
But I should support elimination of the capital gains tax? Since it isn't fair for the rich to be taxed multiple times.
Well this worker bee, single, no children, no home mortgage deduction, pays a very high % of my income annually into this rigged for the weathly system.
And then my income is taxed again, by the state, when I spend it sales tax, taxes and surcharges when I pay all my service bills. The same income taxed again and again and again. At least I missed out on paying City taxes, since I don't live in NYC.
But I should support elimination of the capital gains tax? Since it isn't fair for the rich to be taxed multiple times.
4
Joe buys some stock for $100. It rises 5% a year. At the end of 20 years, it's work $265 and Joe sells it. Joe has a capital gain of $165. At the current long-term capital gains tax rate of 15%, he has a tax bill of $24.75. So he has $225.25 in his pocket.
But, at 3% inflation, that $225.25 has the same purchasing power as only $125.00 at the time Joe bought the stock. So Joe really only netted a gain of 1.2%.
At a minimum, the long-term capital gains tax needs to be indexed for inflation.
But, at 3% inflation, that $225.25 has the same purchasing power as only $125.00 at the time Joe bought the stock. So Joe really only netted a gain of 1.2%.
At a minimum, the long-term capital gains tax needs to be indexed for inflation.
8
It could be indexed for inflation, and the income could be averaged over the duration of the investment, but there is no real world evidence whatsoever to support treating capital gain or dividend income preferentially.
1
And this is true of every fee, tax, payment, etc. not indexed to inflation. So, picking on this one tax is disingenuous unless you make the argument for the minimum wage and every other payment or bill.
2
Was that Joe the plumber? Buying stock for $100? Another Republican tries to describe taxes as some blight on the poor.
Just tax everything as earned income. A plumber works and an investor works. The concept of those who live in the US, inheriting great wealth, enjoying the services of our government, living off dividends and capital gains, and paying nothing is abhorrent. If there is a worry about double taxation, reduce or eliminate corporate taxes. They just move funds around to avoid taxes anyway. Every dollar that leaves the business treasury is taxed as income to the recipient. Worried about people not taking their gains during their lives, tax inheritances aggressively. Make everyone earn their own way. Being born lucky should not be a tax free gift.
19
Income is income no matter where it comes from. Working for $100 or getting a tax refund of $100 or a capital gain of $100 or a dividend is all the same its income. A edge fund manager who gets 1 billion dollars as his/her reward is still income. The difference was created by the very wealthy so they could avoid taxes, its a word game and has no logical basis.
A progressive tax has different levels that you pay different % on. Lower, less ,higher more. We have historical proof that with a tax of greater then 50% on high levels the country does much better. Lower then this the country does much worse.
Its simple all income is income, progressive tax means increasing the amount as you make more.
A progressive tax has different levels that you pay different % on. Lower, less ,higher more. We have historical proof that with a tax of greater then 50% on high levels the country does much better. Lower then this the country does much worse.
Its simple all income is income, progressive tax means increasing the amount as you make more.
15
Of course it has a logical basis. The difference is that when you go to work, you know you are getting paid. When you invest $10,000 in the stock market, you could have a gain or a loss. The lower tax rate is to encourage people to invest notwithstanding the fact that they are not assured of having a gain.
You may disagree with whether this difference is worthy of disparate tax treatment, but there is a difference. And it's a difference that's recognized by many countries that are considered more progressive than the U.S. For example, just to the north we have Canada, with single-payer health care, gay marriage way before we had it here, much less religious influence in government and much more protection for the "common worker." And the tax rate on capital gains in Canada? One half of whatever your "regular" income tax rate is.
You may disagree with whether this difference is worthy of disparate tax treatment, but there is a difference. And it's a difference that's recognized by many countries that are considered more progressive than the U.S. For example, just to the north we have Canada, with single-payer health care, gay marriage way before we had it here, much less religious influence in government and much more protection for the "common worker." And the tax rate on capital gains in Canada? One half of whatever your "regular" income tax rate is.
1
Maybe Rubio is actually running for president in 2020 -- in hopes that the current GOP trainwreck will replace the Republican establishment with Wall Street + evangelicals.
To some extent, Cruz is doing the same thing in 2016, but he seems to be tainted with the unpleasant allure of a Wall Street lawyer + tent revival preacher.
To some extent, Cruz is doing the same thing in 2016, but he seems to be tainted with the unpleasant allure of a Wall Street lawyer + tent revival preacher.
4
Low capital gains tax rates would greatly benefit another (unmentioned) voting block...... retirees.
It's not just for the super-wealthy.
It's not just for the super-wealthy.
3
Except that something like 90% of all retirees have no capital gains at all with the exception of the sale of their house, and the first $250k gain for that is already tax exempt. Except, of course, for super wealthy retirees.
1
It's important to remember that the rationale behind getting rid of the capital gains tax is that it constitutes double taxation. When a business earns a profit, the profit is taxed. When a business distributes its profit to owners in the form of a dividend, as the system currently stands, the profit is taxed again. It's equivalent to paying income taxes on your salary, and paying them again when you draw money from the bank. So while under Rubio's plan the rich would certainly pay less - and, if Rubio successfully lowers the corporate income tax, might pay taxes at a lower rate than some high-salaried employees - to suggest they would have a zero percent tax rate is foolish. "They would pay no taxes except for the taxes they have already paid!"
2
And it's also important to remember that a variety of techniques are used by the rich to turn what would be ordinary income for anyone else into capital gains -- most famously, the "carried interest" loophole, through which for no reason at all ordinary hedge fund income becomes capital gains income; but also things like cost basis updating when property is inherited, so that stocks inherited from the last generation are miraculously freed of tax obligations.
That justification sounds good but won't do, my friend.
That justification sounds good but won't do, my friend.
12
No, not really. It's a little confusing, are you talking about dividends or capital gains?
Dividends are only paid out by (some) corporations. No such thing for sole proprietorships or partnerships. The distinctive thing about dividends is that the corporation doesn't get to write them off its taxes, if they could there'd be no double taxation.
Doing business as a corporation is a choice. That so many businesses choose to do, despite the double taxation, shows that the other benefits of being a corporation out-weigh the double taxation. Presumably these benefits result in a more profitable business, leading to higher dividends and a higher stock price. So if you don't want to be doubly taxed don't incorporate and don't invest in businesses that are incorporated.
Note that there is nothing natural about being a corporation. Our government has chosen to allow this peculiar form of ownership. Many would argue that there are large benefits to the overall society from the existence of corporations. Some of us have our doubts.
Dividends are only paid out by (some) corporations. No such thing for sole proprietorships or partnerships. The distinctive thing about dividends is that the corporation doesn't get to write them off its taxes, if they could there'd be no double taxation.
Doing business as a corporation is a choice. That so many businesses choose to do, despite the double taxation, shows that the other benefits of being a corporation out-weigh the double taxation. Presumably these benefits result in a more profitable business, leading to higher dividends and a higher stock price. So if you don't want to be doubly taxed don't incorporate and don't invest in businesses that are incorporated.
Note that there is nothing natural about being a corporation. Our government has chosen to allow this peculiar form of ownership. Many would argue that there are large benefits to the overall society from the existence of corporations. Some of us have our doubts.
1
I am not moved by the double-taxation argument. When a wage worker is paid, they are taxed. Then when they spend the same money, it is often taxed again. Only rich people get to make this argument and have it heard. These people got rich, often under the very tax rates Republicans want to reduce. The truth is that the rich and their party want to starve the beast - that is cut taxes knowing it will diminish revenue and then use that outcome to force a reduction in social benefits, particularly entitlements. The proponents are greedy liars.
3
I would support tax on capital gains, but only if gains are indexed to inflation. it is stupid and unfair to tax inflation.
4
Then why shouldn't interest on bank accounts also be exempt from tax if interest rate is lower than inflation.
The only difference is that rich people keep their money in the stock market and while non-affluent people keep their savings in the bank.
The only difference is that rich people keep their money in the stock market and while non-affluent people keep their savings in the bank.
While I vehemently agree with many of the commenters herein, I notice a significant number of them hail from Florida - the state that us Marco Rubio. What were you all thinking when you elected him???
I say this full well knowing the my current state of residence gave you all Ted Cruz - and on behalf of the rational minority of citizen-voters from Texas, we humbly apologize and promise to try to do better.
I say this full well knowing the my current state of residence gave you all Ted Cruz - and on behalf of the rational minority of citizen-voters from Texas, we humbly apologize and promise to try to do better.
10
Yeah, but you're from Austin, which ain't really in the state of TX. Shoot, I bet folks ain't even carrying guns on the streets in Austin. Why wouldn't you want the Cruzmeister after experiencing what a great job W did?
All of us didn't elect the hypocrite.
It seems Rubio believes that by eliminating capital gains tax, that would leave companies and individuals with more money to invest elsewhere, which would necessarily lead to more job creation. I'd say the plan is worth a try...if it hadn't already been failing for 35 years.
55
Right. (Jennifer, NJ) Has been noted in these pages that there are trillions of dollars in cash and equivalents in company coffers already that are not being invested. Rather they buy back their own stock to enhance the value of the outstanding shares. They are searching in vain for demand, but ignoring the fact that the decline of middle class buying power has stunted demand, so why increase supply? Republicans, in addition to denial of science, also ignore basic economics.
1
So, is he proposing to reduce to zero the tax rate on "carried interest," i.e., incentive income of hedge fund and other investment managers? What a guy!
7
So, if you're a soldier making your money in a foxhole and risking your life, you should pay tax at a certain rate.
But if you're a fat cat making your money by sitting on your butt, you should pay no tax whatsoever.
It's hard to imagine a tax proposal more insulting to our fighting men and women.
But if you're a fat cat making your money by sitting on your butt, you should pay no tax whatsoever.
It's hard to imagine a tax proposal more insulting to our fighting men and women.
66
For a Party that believes hard work should be rewarded, how can they propose no taxes on investment income, which requires no work whatsoever? (I do not consider hiring an investment firm to be "work"). Rewarding the 1% for doing nothing but making money off the backs of workers.
14
The problem with Trickle Down Theory is it just doesn't work. Award tax breaks to rich people and maybe they would be so kind as to grant us some jobs. After the past 35 years of shrinking middle class and stagnant real incomes for the bottom 90% of us, you would think we'd be done with the Supply Siders' little games. We need to find ways to stimulate the MIDDLE CLASS - more affordable homes, education, and medical care.
The middle class is where the real risk taking and innovation occurs. And stimulating the middle class results in more consumer demand - which then causes capitalists to stumble all over themselves trying to meet that demand (creating jobs in the process).
The middle class is where the real risk taking and innovation occurs. And stimulating the middle class results in more consumer demand - which then causes capitalists to stumble all over themselves trying to meet that demand (creating jobs in the process).
6
The working class thinks capital gains is when you sell your house and move to the sunshine.. playing to the working class financial ignorance is a GOP tactic. say hello to the carried interest scam.
10
It's easy, and quite honorable, to exempt gains from the sale of one's primary residence, up to reasonable middle-class levels, from taxation and still tax speculative investment and similar income aggressively. That's just a policy choice that respects the cycle of life in which Mom and Dad buy a home, raise their family in it, and then downsize (and perhaps relocate to nicer climates) in retirement. That's the difference between real, thoughtful policy and the fantasies of billionaires who buy pathetic lightweights like Marco Rubio.
Once again, Rubio reveals his readiness to pander for donors & plutioctratic support. With no facts to support the fantasy that the accumulation of capital yields jobs and a rising tide, that supply (corporate slush) is more important than demand (wage-based consumption) - Rubio should face an unequivocal head wind. Barro's critique is clearer than most candidates have been !
20
Well, any more questions about who Marco Rubio is a wholly owned subsidiary of? What's next, making inversions for tax savings a feature of tax law for high net worth individuals, perhaps by merging with poor families in Ireland? Excuse me, I'm going to be sick now.
21
A few weeks ago the GOP Congress passed a One Trillion + spending bill with Corporate tax cuts tucked into this neat little Corporate Welfare Bill right under the noses of the Red voters.
This grass roots Tea Party or is it Freedom Caucus now?.. who Terrorize the moderates and are funded by the Worst Corporate dark money interests in the Country helped pass this Bill too with a little Koch pocket money.
The Donor Class funded each GOP Congressmen and gave the Freedom Caucas about 1/2 million each for this little doozy.
Yet, these lying sack of Cretans are out selling this whole grass roots anti-establishment thing when they are if fact RUN by the Donor Class to buy a vote from red voters based in God and Guns.
Rubio and Cruz are Donor Class and the worst ESTABLISHMENT of all the more I look as Kasich the ONLY ONE running on hope and balancing State and Federal Budgets while creating jobs is the only Anti-establishment choice of the Republicans who care about Math and Integrity.
...Until then I will stick with two Dems who have well laid plans and care about All Americans.
This grass roots Tea Party or is it Freedom Caucus now?.. who Terrorize the moderates and are funded by the Worst Corporate dark money interests in the Country helped pass this Bill too with a little Koch pocket money.
The Donor Class funded each GOP Congressmen and gave the Freedom Caucas about 1/2 million each for this little doozy.
Yet, these lying sack of Cretans are out selling this whole grass roots anti-establishment thing when they are if fact RUN by the Donor Class to buy a vote from red voters based in God and Guns.
Rubio and Cruz are Donor Class and the worst ESTABLISHMENT of all the more I look as Kasich the ONLY ONE running on hope and balancing State and Federal Budgets while creating jobs is the only Anti-establishment choice of the Republicans who care about Math and Integrity.
...Until then I will stick with two Dems who have well laid plans and care about All Americans.
22
The usual GOP bait and switch at work here.Anyone think that Marcos' tax cut is a secret plea for campaign donations? This has no chance for approval but may get him the usual spend and defer crowd throwing money at him. The time is long past for the reckless GOP insanity of useless spending on war and tax cuts for the rich to be paid for by a broke, broken down country starved for real investment. If you want to live in a country that is worth living in , vote for Bernie, if you want a 24/7 all war all the time , move to Syria and see how that feels.
16
How many tax cuts do we have to give that segment of our population who has the most? Some of these people have wealth in the billions. Obviously, they are NOT being hurt by their tax rates and could easily suffer higher rates. Easily. I, on the other hand, who live on a very low income (Social Security) didn't even see a cost-of-living increase this year, republicans in congress are talking about adjustments to "entitlements" again, millions haven't seen a raise in their wages in years.... How does anyone think that the people at the top need more??? How????
27
Article fails to suggest how much this plan would cost.
3
You can see the Koch puppet dancing on his strings.
12
...while the puppet panders to its handlers; a cozy symbiosis awash in a sea of money.
3
More trickle down on steroids...brilliant
9
Despotism.
10
How about a game of chicken - those individuals making less than $100,000 in salary/wages would pay NOTHING. Whee !!!
6
5. Simplification and standardization will slash $trillions of private sector healthcare and insurance profit, bureaucratic, administration and compliance costs annually while giving free healthcare to everyone who wants it and giving more money to every citizen rich or poor to spend on themselves to buy food shelter, life’s basics, pay for education, go on vacation, have a fling or pay for any of the things that you would like to purchase with your weekly UBI money.
3
Want any more evidence of what a shallow, stupid empty suit Rubio is.
The man would be a the payday lending store every month if he did not have a government paycheck and a sugar daddy billionaire named Norman Braman. Guess it is Braman who doesn't want to pay capital gains so his lapdog make this asinine proposal. You can be sure Rubio doesn't pay capital gains. After 20 years as a dismal lawyer and as a public official he does not have a pot to urinate in much less a dollar in investments or in the bank.
What a shallow, ignorant creature this is. And has the punditry shouting all over cable television news that he has "momentum" ever actually examined this empty creature? No, they don't do that, they are just a bunch of overpaid, self-involved bookmakers whether their names are Reilly or Mathews.
This thing becomes president, we will deserve it for our own stupidity as a nation.
The man would be a the payday lending store every month if he did not have a government paycheck and a sugar daddy billionaire named Norman Braman. Guess it is Braman who doesn't want to pay capital gains so his lapdog make this asinine proposal. You can be sure Rubio doesn't pay capital gains. After 20 years as a dismal lawyer and as a public official he does not have a pot to urinate in much less a dollar in investments or in the bank.
What a shallow, ignorant creature this is. And has the punditry shouting all over cable television news that he has "momentum" ever actually examined this empty creature? No, they don't do that, they are just a bunch of overpaid, self-involved bookmakers whether their names are Reilly or Mathews.
This thing becomes president, we will deserve it for our own stupidity as a nation.
22
This would be huge (or if you prefer "yuge") for two groups. The 1%'ers who get a large portion of their income via capital gains and the lawyers who would be hired to convert the balance of their income to also qualify.
9
Great move Rubio. Increasing the deficit right off the bat. Tell me, is it the poor and middle class you will tax to make that up. Or is it my SS and Medicare you will cut to pay for that?
46
So right. The most nauseating thing about Rubio's plan to give the very wealthy another break they don't need is that he smiles as he puts another screw to the poor and middle class.
3
The problem is in the definition of capital gains. Buying and selling publicly traded securities is not an investment, it is gambling and should be treated as such. If you buy 100 shares of Apple, you are not buying them from Apple, the money does not go to Apple, the only reason they even know you bought them is to send you an annual report and vote your shares. Capital gains is when you start a business and sell it (or go public), that is an investment. There are growth stocks such as tech that re invests all their earnings in expanding and growing and pay no dividends and income stocks such as utilities P&G, .. who pay dividends. Cutting tax on dividends was an ANTI GROWTH tax cut, people shifted their investments (sold tech and bought income stocks) to shore up their stock prices companies like Intel and Microsoft started paying dividends. Between them those two companies pay about 9Billion dollars a year enough to start 1000 companies a year and if only 10% survive that is 100 companies a year. 10-15% real capital gains tax would not hinder start ups
2
So when I buy stocks in my IRA and leave them there for 30 years I'm not investing, I'm gambling?
Gambling is a zero-sum game: either you or the house wins, but no wealth is created. On the other hand, the purpose of investing is to provide capital that can be used to create wealth that didn't previously exist. Don't conflate "taking on risk" with "gambling."
It's pathetic how the Republican candidates pull on political threads to see how much yardage they might get. Nothing appears to be too loony. Just how is this cut in tax revenue going to be made up? Taxing lower income people? Cutting the government down to near anarchy? That's the Republican fantasy world.
12
As opposed to promising free health care for everyone, free college tuition, and bigger Social Security benefits like Bernie? Look, I don't think Rubio's plan is viable either, but let's not act like pandering to the voters is something that only Republicans do.
This tax plan would have been *such* a help to Marco's bartender father and maid mother! Just think of what they would have saved in capital gains taxes. Marco, *tell us more* about your humble beginnings, and how you're always fighting to help people in your parents' economic class.
12
I remain a supporter of The FairTax which would eliminate the income tax and taxes on business entirely. This is the only alternative that would provide more than enough income to fund the govt., while encouraging spending and business growth. And it is "fair" because you would only be taxed on what you purchase. Buy a new car, house, boat, etc... and you are taxed. Let's be real... those making a million a year whether through investments or income have the current ability to hide and/or not pay taxes on most of that already. Those in the middle class are stuck paying the most with the least when looking at the % of their true income going to taxes. If you are going to debate against The FairTax, at least show you have read it and are familiar with it, and not just throwing sh88 at the wall to see if it sticks.
A Flat Tax is NOT fair. How is paying 15% of a $25,000/yr income v. paying 15% of a $500,000/yr/income "fair"? It's not. Part of the reason for that is the Federal govt. has set standards for living so low it skews any attempts to "fix" problems. In todays economy it is a struggle for a single person to live on $30,000/yr. Yet the Feds have determined a family of 4 should be able to live on $25,000/yr. or a single person on $11,000/yr. We are more and more guided by people who are so far removed from reality that standards are non-sensensical.
Last, the Tax Code needs to be abolished and rewritten, which The FairTax would do. Others ignore this.
A Flat Tax is NOT fair. How is paying 15% of a $25,000/yr income v. paying 15% of a $500,000/yr/income "fair"? It's not. Part of the reason for that is the Federal govt. has set standards for living so low it skews any attempts to "fix" problems. In todays economy it is a struggle for a single person to live on $30,000/yr. Yet the Feds have determined a family of 4 should be able to live on $25,000/yr. or a single person on $11,000/yr. We are more and more guided by people who are so far removed from reality that standards are non-sensensical.
Last, the Tax Code needs to be abolished and rewritten, which The FairTax would do. Others ignore this.
1
How would financing of the federal govt by a large sales tax be fair to the poor, any more than a flat income tax would be? Would you bring Milton Friedman's idea of a guaranteed annual income out of mothballs and try to get it passed so Everyman's burden of food, housing and other basic expenses would be provided for?
Since we're talking about policy positions, perhaps Rubio supporters here would please identify a few significant policy differences between Rubio and Dick Cheney.
2
Finally, an article actually about policy, and not polls.
23
Yes, an article about policy, not polls. But, unfortunately, if the number of reader comments is any indicator, the articles about polls generate more interest. Or am I missing something?
1
Yes, and this policy proposal should open a trapdoor under Little Marco's high-heeled booties in the polls. If anyone is paying attention.
Wow, can the media please stop pretending Rubio is mainstream now? This is way further off center than anything Bernie Sanders is proposing. I guess this is just the billionaires trying to shift the narrative back to the right.
4
By all means, ignore the fact that along with the increase in capital gains the disparity in wealth has only GROWN! Also ignore the fact that the relatively low rates during the Bush years were accompanied by consistent reduction of the annual deficit that would've eventually resulted in a balanced budget by 2012 if not for the real estate crash (which had nothing to do with the capital gains rates). Ignore the result of prior lowering of rates during Reagan years. Keep soaking the rich. Watch the rich get richer, then whine a lot about them and try to elect socialists.
In reply to GJ:
I have trouble believing many of the facts you base your opinions on. If I recall, when Bush replaced Clinton the US was running annual surpluses. One of Bush's early acts was to get a big tax cut passed in Congress. I remember some of Bush's advisors, Cheney in particular, arguing that budget surpluses weren't good anyway because the US economy had no way of absorbing these surpluses. Then came two off-budget wars and deficits on the order of 1/3 trillion dollars per year. Over 8 years, that adds up.
I have trouble believing many of the facts you base your opinions on. If I recall, when Bush replaced Clinton the US was running annual surpluses. One of Bush's early acts was to get a big tax cut passed in Congress. I remember some of Bush's advisors, Cheney in particular, arguing that budget surpluses weren't good anyway because the US economy had no way of absorbing these surpluses. Then came two off-budget wars and deficits on the order of 1/3 trillion dollars per year. Over 8 years, that adds up.
3
What? I have to be a rebel? How the hell do I pull that off, when I'm clearly in the pocket of GOP PACs?
Oh, I know! Kinda like "read my lips" except "don't listen to what I say, understand what I mean!" That'll work. Costs nothing to play, right?
Oh, I know! Kinda like "read my lips" except "don't listen to what I say, understand what I mean!" That'll work. Costs nothing to play, right?
Over the past 20 years most of the G20 countries have lowered their corporate tax and capital gains tax. China in fact has a policy that has ZERO corporate tax if you relocate a high tech industry there. Of course the NY Times would never put this into headline news. Their liberal readership would not like these issues brought to light. These other countries discovered to compete globally they must not tax the means of production because this helps to create jobs, raises the standard of living and help pays some taxes. GE has just moved out of Connecticut and is building a Gas Turbine Plant in Tuscany Italy. Sikorsky is closing up facilities in Connecticut and is build parts in Poland & Russia, who would have thought. If you punish risk, investment and success get get much less of it.
1
Until the people you left behind, left jobless, can no longer afford to buy the stuff they used to make. As long as money keeps trickling up faster than it trickles down, the economy of a country, or the world for that matter, is headed for a crash that will happen when average people of America, China, Poland, etc run out of shopping money. Taxes are the real trickledown, whether it's property, income, dividend or capital gains tax. To a lesser extent it's sales tax, because sales tax mostly hits the people that govt spending should be trickling down to. Kansas' Gov Brownback and his friends are proving that a sales tax hike doesn't work so well---it's probably 50%-75% counterproductive for state revenue generation.
1
The rich will pay even less taxes on their earnings. It's a good time to be rich
2
In all of these articles about capital gains tax rates being lower than earned income tax rates, no where is it mentioned that capital gains completely avoid paying 7.65% FICA taxes that earned income is subject to. Why isn't that fact enough of a perk?
3
Supergood point! This is another reason to treat investment income as ordinary taxable income and extend FICA tax to all income.
Hmm... maybe that's because no one earns a Social Security check based on their capital gains income either.
The capital gains tax makes very little difference to average small investors, only to the wealthy. The capital gains tax should be progressive, and much higher than it is.
3
OR, we can just scrap the capital gains tax and make the rich pay their fair share, in the first place.
1
Given the ease of avoiding corporate taxes it's dubious that even dividends are double taxed, but it is a REAL stretch to say capital gains are. These are simply arguments designed to send the rest of us away muttering to ourselves in helpless confusion while the billionaires continue to use their political servants to write tax laws exempting themselves from paying their fair share.
Rubio's plan is only the MOST outrageous and unjust among the many outrageous and unjust plans put forward by the Regressives. Presumably that will make him the most successful fundraiser among them.
Rubio's plan is only the MOST outrageous and unjust among the many outrageous and unjust plans put forward by the Regressives. Presumably that will make him the most successful fundraiser among them.
7
A Republican calling for lower taxes on the rich? Tell me it ain't so.
4
The income of the rich is capital gains, stock options and salary. Most people have a little capital gains if they invest but this Rubio idea is like eliminating taxes altogether for the rich. Follow the money to see who is funding Rubio's giveaway idea. He is known in Fla as using his position to be a paid "consultant " for special interests. That way he does not have to go to work
2
Kings never paid taxes, their subjects did.
4
Funny that the Rockefellers and Kennedys are the example Romney used 20 years ago and the author sticks to throughout this piece to demonstrate who would benefit from lower tax rates on capital gains. Very antiquated example. These families names are now associated with public service. More appropriate examples are the Kochs and Adelsons.
6
Rubio is like someone who got where he is only because of Affirmative Action.
But instead his upward mobility is based on of Plutocratic Action.
Anytime Rubio says someone, everyone should just shrug their shoulders and say, "The only reason he thinks that is because his billionaire daddy told him to."
But instead his upward mobility is based on of Plutocratic Action.
Anytime Rubio says someone, everyone should just shrug their shoulders and say, "The only reason he thinks that is because his billionaire daddy told him to."
2
If they eliminate taxes on capital gains then there should be a wealth tax on worldwide net worth applied to individuals, trusts, private companies, off-shore trusts, private foundations, etc. If the superwealthy are willing to pay 3% plus to a hedge fund for mediocre results, then a 3% wealth tax is certainly justified.
However, without a wealth tax the elimination of captial gains tax would widen even further the gulf between the super rich and the rest of humanity. There is actually no economic or social reason why capital gains enjoy a lower tax than wages. If I work 40 to 60 hours a week at $15/hr, I am certainly taking a huge risk - probably much more than the billionaire buying a 1000 shares of Altria!!
And the rampant speculation in our financial markets is primarily due to the low, low short term capital gains tax rate which makes betting on price movements in milli-second time frames so profitable - which is actually destructive to the economy and true investing. Short term capital gains taxes should start at 80% tax rate for gains made under 1 year....
However, without a wealth tax the elimination of captial gains tax would widen even further the gulf between the super rich and the rest of humanity. There is actually no economic or social reason why capital gains enjoy a lower tax than wages. If I work 40 to 60 hours a week at $15/hr, I am certainly taking a huge risk - probably much more than the billionaire buying a 1000 shares of Altria!!
And the rampant speculation in our financial markets is primarily due to the low, low short term capital gains tax rate which makes betting on price movements in milli-second time frames so profitable - which is actually destructive to the economy and true investing. Short term capital gains taxes should start at 80% tax rate for gains made under 1 year....
3
Whoa! So income from actual work would be taxed, but income from investments (disproportionately controlled by the top tenth of one percent of Americans) would not. It is still income, but no responsibility for those who benefit from it to support the infrastructure, schools, military, and everything else required to allow that income to occur? Hmmmmm, and I thought there was a problem with income distribution in the US.
This is a plan that only people like the Kochs could appreciate.
This is a plan that only people like the Kochs could appreciate.
36
Carden, it isn't only those like the Kochs could appreciate; the top 1%, possibly the top 5%, would too.
For those who are concerned that we have a bubble economy now, a zero capital gains tax on the sale of stock would produce a bubble economy on steroids. Good tax policy would encourage investment in productive capital, not speculation in financial assets.
12
I don't even need to read the article to conclude that this is one of the most absurd ideas in the ether. Rubio is blatantly, brazenly pandering to a chunk of his donor base. I can think of no good fiscal outcome for such a giveaway, what is essentially a redistribution of vast monies by legislation, fiat, or 1% influence. He would be, in effect, appropriating--that is, stealing--money from the pockets of every other American lacking a fat portfolio, and they/we would either have to make up the tax base difference, and/or do without services that the government provides. This is another attempt to reduce the size and function of government by depriving it of resources. Therefore, Rubio has an ulterior agenda which has little to do with fiscal responsibility and certainly not with a balanced budget. He's nowhere close to the presidency and already he is scheming to bankrupt the nation so his cronies can continue to buy it short. Like Rubio's candidacy, we must ensure that proposals like this are always d.o.a.
13
Tax anything and you will get less of it. Tax capital gains and you will get less capital investment. Tax policy needs to be about fairness first, then economic growth. A zero cap gains tax is not politically viable, a reduced rate is, and should be. I have just read chapter 3 of The Oxford History of the French Revolution. The French king spent a fortune on his opulent court and the thousands of his cronies and then doubled down, sending the fleet across the ocean to help America defeat the British. The French were deep in war debt. The finance minister called an Assembly of Notables to fix the financial mess. The nobility and the clergy, who were largely exempt from taxes, would not agree to pay more taxes as the regime tottered due to excessive debt. A few years later the taxpayers took matters into their own hands. The King and his rich buddies lost their heads, the economy sank into depression, terror and the common people suffered for long time until a new government was established and the economy began to grow again. Let's not go down that road. We need a balanced tax policy, everyone paying their share. Now then, how do they justify the "carried interest" exemption? (And I am a Republican).
3
Each of the combined $1.3 trillion in tax expenditures (deductions, credits, deferrals, special rates and exemptions) share the unintended effect of taxing others more. For the top 10% this means that the share of wealth has increased from 67% to 75% over the last 20 years. Many still cannot afford to invite more than 250 guests to their daughter’s wedding. The poorer half of the population now shares 1% of family wealth (a decline of 70%) and young adults increasingly don't bother to marry.
Conservative tax reformers like Ted Cruz and the Koch Group share an unlikely philosophical alliance with progressive groups like Oxfam which call for the elimination of tax havens and increased taxation of accumulated wealth. Cruz has not addressed wealth taxation but knows conservative voters will vote against their own short term economic interests to promote fairness and market pricing.
Democrats, moderate Republicans and crony conservatives (like those at the Heritage Foundation) believe they can ignore the devastating social harm caused wealth redistribution. They support political deals with annual packages of tax extenders that the leadership feels gives a balance to left and right interests. Marco Rubio is a dealmaker and has pandered to the tax reform demands of those at the Heritage Foundation who want to exempt all financial income from taxation and necessarily increase taxes on workers. See "A Tax Reform Primer for the 2016 Presidential Candidates".
Conservative tax reformers like Ted Cruz and the Koch Group share an unlikely philosophical alliance with progressive groups like Oxfam which call for the elimination of tax havens and increased taxation of accumulated wealth. Cruz has not addressed wealth taxation but knows conservative voters will vote against their own short term economic interests to promote fairness and market pricing.
Democrats, moderate Republicans and crony conservatives (like those at the Heritage Foundation) believe they can ignore the devastating social harm caused wealth redistribution. They support political deals with annual packages of tax extenders that the leadership feels gives a balance to left and right interests. Marco Rubio is a dealmaker and has pandered to the tax reform demands of those at the Heritage Foundation who want to exempt all financial income from taxation and necessarily increase taxes on workers. See "A Tax Reform Primer for the 2016 Presidential Candidates".
3
One of the reasons given for lower cap gains taxes is that some of the gains are not increases in real income, but rather are just inflation. The longer an asset is held, the more of the price increase is due to inflation rather than any real increase. Of course, this argument meant more back in the 1970s and 80s when inflation rates were much higher than they are now. But since most capital gains go to the very wealthy, I don't think this argument carries much weight.
4
When you start to see Republican economic advisers admitting that tax cuts on dividends and capital gains aren't working, you know the game is up.
26
Such huge tax cuts for the wealthy, and the trillions of dollars of increased spending he proposes for the military, will have to be followed with huge cuts in spending which will mainly impact the poor and middle class. The rest of us will be forced to pay more or suffer more so the rich can prosper. Rubio is a scary guy.
78
Rubio and the rest of the Republicans are scary.
1
Good work by the Times to highlight and analyze one of the "mainstream candidates"' more ludicrous and plutocrat-pandering proposals. I often wonder if the frothing xenophobia and racism of Trump and Cruz is simply meant to make the standard Republican billionaire-coddling agenda seem less extreme than it really is. Remember when Republicans were about responsible government budgets?
59
Economic growth was lower in the Oughts and the 1980s when there was a low tax on capital gains compared to ordinary income and higher in the 1990s when the gap was much smaller (28% ordinary income and 20% capital gains. The most regressive part of the income tax system is the differential between "capital gains" and ordinary income. When the Bush tax cuts were enacted in 2001 and 2003, a huge explosion of growth was promised. The opposite occurred.
34
American workers pay to much tax already. For example we pay approximately 15 cents on every dollar for income tax. Then 9.75 cents sales tax when we spend that dollar. That's 24.75 cents out of that dollar. Then there's the gas tax on every gallon of gas you buy. That varies by state. Then there's property tax every year on what you already paid tax on, which also varies in different areas. So let's just approximate that between gas tax and property tax that's another 10 cents on that dollar. That brings us up to around after rounding off to 36 cents out of each dollar for taxes. That leaves us with 64 cent of each dollar we make. Really? Does the government want all of our money? YES!
3
@Jim Lowder
Tennessee
The topic under discussion here is capital gains taxes that are mainly paid by the wealthy on asset appreciation like equities. Aside from that the US has one of the lowest tax takes in the world. You need to a) understand what the issue is and b) move into the real world where nuclear subs, schools, retirement benefits, health benefits and the like have to be funded.
Tennessee
The topic under discussion here is capital gains taxes that are mainly paid by the wealthy on asset appreciation like equities. Aside from that the US has one of the lowest tax takes in the world. You need to a) understand what the issue is and b) move into the real world where nuclear subs, schools, retirement benefits, health benefits and the like have to be funded.
41
I agree. Just another idea paid for by the wealthy elite who bankroll the campaigns in our country. I'm so tired of seeing our elected officials dangling carrots to the middle and lower class (child tax credits) in order to fulfill the true objective of their plans, which is always to carry out the marching orders of their corporate bosses and make them more wealthy, regardless of the cost to our country. We need to get big money out of the picture, period.
7
So you are in favor of the federal tax rates on your wages of anywhere from 18 to 24%(The Cruz plan) instead of your current 15%?
3
The idea that with a higher cap gain tax rate folks won't sell investments is a weak one. For one thing, anyone with investment in mutual funds will have capital gains income because of activity in the fund, i.e., there is no choice not to 'sell' because of a higher rate.
Also, many of the well-off and even the nearly well-off are not regularly using that capital gain income to create jobs or start businesses. The idea of letting such income off the tax hook is foolish at best.
Also, many of the well-off and even the nearly well-off are not regularly using that capital gain income to create jobs or start businesses. The idea of letting such income off the tax hook is foolish at best.
48
OK, just how will any President get this idea all the way through Congress? Oh, that's just niggling detail - Right? No, it's the exposure of the empty promise.
While we're at it, the whole issue of "Double Taxation" is misleading. Heck, the owner of my local Diner could claim that the $25 I paid for lunch was already taxed when it came to me so it should be tax exempt for his business.
Given, there is a long history of hatred of taxes in America. But we still have to pay our bills, even the ones that you object to but get a benefit from.
Bottom line is that the majority of Presidential Promises are non-starters, let alone not able to get through Congress. Let's start putting the candidates through the explanation of how they will be able to make their ideas law. Executive action, perhaps?
While we're at it, the whole issue of "Double Taxation" is misleading. Heck, the owner of my local Diner could claim that the $25 I paid for lunch was already taxed when it came to me so it should be tax exempt for his business.
Given, there is a long history of hatred of taxes in America. But we still have to pay our bills, even the ones that you object to but get a benefit from.
Bottom line is that the majority of Presidential Promises are non-starters, let alone not able to get through Congress. Let's start putting the candidates through the explanation of how they will be able to make their ideas law. Executive action, perhaps?
23
What do you know. An actual article that highlights policy differences between candidates in lieu of the typical gibberish that highlighs personality flaws and superficial strategies to appeal to particular constituents.
86
Man! I had not thought of that, but it's yooge!
1
Figuring out why someone making under $10 million a year would even consider voting for one of these billionaire lapdogs taxes my intelligence.
122
The zero tax on capital gains is attractive even to those making only $200,000/year.
The majority of middle class voters supporting these plutocracy enhancing ideas do so out of ignorance. America has had a declining level of literacy, especially on finance, economics and math, for several generations now.
As a long time education policy person I, and others, have tried to wake up America to the long term negatives of basing school on social promotion, false self esteem, and outright fraudulent testing and measurement measures that tell people every child, school, and state is above average, when on world standards few match up to any other first world country.
This year's election fervor just proves the dangers of enhancing demagogues and fascists when voters do not have the knowledge to understand and make better decisions and instead just follow the loudest, rudest, or most entertaining.
As a long time education policy person I, and others, have tried to wake up America to the long term negatives of basing school on social promotion, false self esteem, and outright fraudulent testing and measurement measures that tell people every child, school, and state is above average, when on world standards few match up to any other first world country.
This year's election fervor just proves the dangers of enhancing demagogues and fascists when voters do not have the knowledge to understand and make better decisions and instead just follow the loudest, rudest, or most entertaining.
2
I frequently read in these pages commentaries on how hard it is to get by in New York City with an income of $300,000 or $500,000 or some other figure rather monstrous to those in the deep hinterland. Usually this is part of an explanation grounded in private school fees, vacations, housing costs, etc, and as a preface to decrying a potential tax incrfease. I also read that one needs work requirements for food stamps, or a tax structure that requires everyone to have some "skin in the game". i.e., we need low-income people to be coerced but if anything Rubio's plan says those better-off must be induced or compensated to keep earning high incomes. Yet when private school fees rise, or skiing in Aspen becomes more expensive, or condo fees rise we do not see those consumers fleeing to public schools, Atlantic City vacations, or Long Island City or Plainfield residences. What parent will announce to others at Plutocrat Country Day that next year Hortense will be in P.S. 389? People accustomed to comfortable lifestyles will strive to maintain those in the same way people on food stamps will strive to eat. They may cut a day off the ski trip to the Rockies but they will not settle for the Catskills. Time to tax capital gains and dividends as ordinary income, with the debatable exception of IPOs, ending them entirely for art, jewelry, and other non-financial market investments. Appreciate Jackson Pollock for art, not for capital appreciation. The latter drains the investment pool.
73
999: Very interesting idea about no cap-gains break for non-financial assets. The article and commentary gives little attention to the fact that cap-gains on stocks reflect corp income taxes already paid. Double taxation is usually bad. However, same is not true for assets other than stocks. I suppose real estate pays property tax and should be excluded in a proper cap-gain tax assessment, though I am not sure.
"...$50,711
The median household income across New York City stands at $50,711, according to 2010-2012 estimates from the U.S. Census Bureau...."
Even in the wealthiest Manhattan neighborhoods, its just over $100k. And for the entire borough of Manhattan, it's $66,739. So anyone who tells you that making 2-10 times those amounts "is not much" in NYC is lying to you. Ditto for SF and LA, etc.
http://project.wnyc.org/median-income-nabes/
The median household income across New York City stands at $50,711, according to 2010-2012 estimates from the U.S. Census Bureau...."
Even in the wealthiest Manhattan neighborhoods, its just over $100k. And for the entire borough of Manhattan, it's $66,739. So anyone who tells you that making 2-10 times those amounts "is not much" in NYC is lying to you. Ditto for SF and LA, etc.
http://project.wnyc.org/median-income-nabes/
2
But today's Democratic Party seems to be opposed to the employment of the poor worker looking to become independent of government help.
I understand that's specifically why Obama ditched the ''shovel-ready jobs'' thing. Too many capitalists would also have profited, and his radicals side talked him away from it.