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Posts Tagged ‘Capital Gains Tax’

Every economic theory – even socialism and Marxism – agrees that saving and investment (a.k.a., capital formation) are a key to long-run growth and higher living standards. Yet the tax code penalizes with double taxation those who are willing to forego current consumption to finance future prosperity. This new Center for Freedom and Prosperity video explains why the capital gains tax should be abolished.

Unfortunately, Obama wants to go in the wrong direction. He wants to boost the official capital gains tax rate from 15 percent to 20 percent – and that is after imposing a back-door 3.8 percentage point increase in the tax rate as part of his government-run healthcare scheme.

Share this post with your friends and neighbors. If enough people understand why the capital gains tax is a job killer that reduces American competitiveness, perhaps the wrong thing won’t happen.

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The punitive class-warfare mentality of the left can be found buried in the healthcare bill. The Wall Street Journal dug deep and found a big capital gains tax increase. Ideally, there should be no double taxation of income that is saved and invested, which means the right tax rate is zero. Boosting the rate from 15 percent to 25.4 percent is a big step in the wrong direction, of course, and almost surely will lose revenue (and definitely will undermine growth):

Our job is to read bad legislation so you don’t have to, and on that score we may demand combat pay for plowing our way through the House health-care bill that passed on Saturday. …House Democrats are funding their new entitlement with a 5.4% surtax on incomes above $500,000 for individuals and above $1 million for joint filers. The surcharge is intended to snag the greatest number of taxpayers to raise some $460.5 billion, and so the House has written it to apply to modified adjusted gross income. That means it includes both capital gains and dividends. That surtax takes effect on January 1, 2011, or the day the Bush tax rates of 2001 and 2003 expire. Today’s capital gains tax rate of 15% would bounce back to 20% because of the Bush repeal and then to 25.4% with the surtax. That’s a 69% increase, overnight.

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