Tag Archives: wealth

Capital Gains Taxes and the GOP

Capital Gains Rates Change

Capital gains tax rates have fallen from a high of 38% to a 40-year low rate of 15% right now. 50% of ALL capital gains go to the 0.1% richest Americans...but yet the GOP wants to cut or eliminate capital gains taxes.

This recent article highlights the incredible effect capital gains have on wealth distribution in the U.S.    The highest 0.1% of income earners in the U.S. receive a staggering 50% of all capital gains in the U.S.   Of the Forbes 400 highest earners, 60% of income comes from capital gains.  The capital gains tax rate used to be nearly 40%, but over the last 30 years, that number has been whittled down to only 15%…to the GREAT delight of the uber-rich, as their share of the American pie continues to grow, at the expense of the rest of us.

Despite the incredible role capital gains (selling property or selling investment shares) have played in fueling the growing income disparity in the U.S., capital gains taxes have been a major talking point for the GOP, including GOP presidential candidates.  A majority of GOP candidates have proposed COMPLETELY eliminating the capital gains tax.   Eliminating the capital gains tax would cost Federal coffers about $100 BILLION a year, or $1 trillion over 10 years.  The “super committee” currently is trying to find a way to reduce the deficit by $1.2 trillion over 10 years…and has pretty much admitted it will fail to find a way to do so.  But yet despite our economic distress, despite the inability of Congress to find ways to reduce the deficit, many in the GOP are calling for a complete elimination of a tax on the uber-rich, which would effectively WIPE OUT any deal the super committee might come up with.

Somehow, our economy survived, and thrived, when capital gains taxes were over twice as high as they are today.  But for the GOP and their uber-rich puppet-masters, it evidently isn’t enough to greatly reduce the capital gains tax, they would like to completely eliminate the tax.   Leave it to Republicans to focus on cutting a tax that primarily benefits the richest 300,000 Americans.

And the Rich get Richer…

U.S. Wealth Gain

Of all wealth gained in the U.S. since 1983, almost 82% went to the richest 5% of Americans, while the poorest people actually lost wealth.

Class warfare.  That’s what John Boehner, Mitch McConnell, Paul Ryan, and pretty much the entire group of GOP presidential candidates have called Obama’s proposal to (gasp!) tax the rich.   As this story points out though, since 1983, the vast majority of America’s growing wealth went to those who didn’t need it.   An astounding 81.7% of all new wealth generated since 1983 went to the richest 5% of Americans.  ONLY the top 40% of Americans by wealth gained wealth over the period, while the bottom 60% of Americans actually lost wealth since 1983

I feel like I’m beating a dead horse lately with the topics I’ve been addressing, but given the news lately, the topic keeps rearing its ugly head.   Wealth inequality in the U.S. continues to grow, the rich do indeed keep getting richer and the poor do indeed keep getting poorer.  But in very dark economic times, when “shared sacrifice” is supposedly needed, we can’t ask the richest Americans to pay their fair share?   An attempt to raise taxes on the wealthiest Americans, the ONE group the recession hasn’t seemed to harm, is decried as “class warfare” by the GOP?

Don’t shoot the messenger here, but in some ways, you know who is partially to blame for the growing gap between rich and poor?  The working poor themselves.  WAIT!  Let me explain!!  As I’ve stated before out here, I will NEVER understand the motivations that have somehow led to SO many working class Americans to identify themselves as Republicans.   When over a period of many decades, wealth distribution is continually skewed towards the rich, why would SO many working class Americans relate to a party that wants to reduce or eliminate their right to collectively bargain and form unions?  Why would SO many working class Americans relate to a party that supports a tax structure where, as he himself states, Warren Buffett pays the lowest tax rate of anyone in his office, including his lowest paid secretaries? 

Obama tried to change “politics as usual” in Washington.  He spent much of the last 2 years attempting to compromise with Republicans, only to find that Republicans weren’t the slightest bit interested in compromise.  He agreed to extend the Bush tax cuts without asking for anything in return.  He tried to negotiate with Boehner and the GOP over the debt ceiling debacle, and came off the fiasco of a “negotiation” looking very, very weak.   Thank GOD Obama has started to take the gloves off and play hardball.  As he has found out, you simply can’t change the politics in Washington all by yourself.  You can’t attempt to negotiate with those who are unreasonable, and in trying to do so, he just kept coming away with a bloody nose.

With Obama’s jobs program he recently announced, and now with Obama’s stance on long-term deficit reduction, including his threat to VETO any attempt to reduce social welfare programs if tax increases weren’t included in a debt deal, it appears he’s finally realized that the only way to deal with the Republicans is to beat them at their own game.  Obama has learned to call the GOP’s bluff…now we’ll see if the GOP continues to bank on the American public supporting millionaire tax cuts over a more equitable system.