Republican presidential candidates are pushing for lowering the capital gains tax or even eliminating it completely. They argue that the tax on profits from selling stock hurts business investment.
A recent editorial in U-S-A Today points out a few facts we should consider. 76% of the capital gains taxpayers in 2009 were in households with more than $250,000 income. There are also exemptions to lessen the burden for investors and small business starters.
The Congressional Budget Office says eliminating the capital gains tax would mean forgoing $574 billion in revenue over the next five years. Ouch! The tax rate has dropped from nearly 40% in 1977 to 15% today for gains held for at least a year. That’s less than half the top rate for ordinary income. That’s why billionaire investor Warren Buffett questions why he pays taxes at a lower rate than his secretary.
It seems to me the question is: Will a lower capital gains tax create jobs … or simply concentrate more wealth in the hands of the few?
Our thought for today is from Rex Stout:
“Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth.”