It's about the only solution to the deficit proposed by Paul Krugman, Obama et. al.
Super - rich folks like Warren Buffet , Bill Gates , Ted Turner and now Mark Zuckerberg say they are in favor of paying higher taxes. The only problem is that raising tax rates will NOT result in their paying more in taxes. The super rich have most of their wealth in stock and most of their income is a capital gain. The current tax rate on capital gains is 15%. In 2006, Buffet paid 17.7 % in taxes on income of $46 million. The Kerrys routinely pay 12% on income of $ 5 to 6 million.
In order to get more money out of the super rich we have to raise the capital gains tax rate. Instead, Obama and his fellow Dems have focused on SALARIES of $250,000 or more. That represents the top 3% of earners. The current top rate of 35% is paid by those earning more than $374,000. It's 38% if we include Medicare . A typical hedge fund manager pays about half that tax rate.
Raising the capital gains rate back to the 20% it was before Bush The Dumber cut it to 15%, would increase revenue by $12 billion. A drop in the bucket compared to deficits of over a trillion dollars. Restoring it to the 28% it was before Clinton reduced it to 20 % would only generate a few billion more. And when Clinton did so, what happened to revenues ? Even Obama ( who is paid to KNOW this stuff ) was surprised to learn that they went UP !



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