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.