Why Are We Assuming That Only Rich People Pay The Capital Gains Tax?
“What’s very clear is that you do have to raise rates,” said outgoing Senator Kent Conrad about the nation’s deficit and debt problems in a Wasington Post interview. “You certainly have to [raise taxes] on capital gains and dividends. From 15 percent to 35 percent — that’s a 20 point difference. There’s no way to get the revenue necessary without significant changes on capital gains and dividends, to have any kind of fair tax system,” said Conrad.
“For the very wealthy, it’s an incredible advantage they have on capital gains and dividends.”
That’s an interesting comment. Why are we assuming that it’s only the “very wealthy” who have income from capital gains an dividends?
According to Gallup, some 54% of Americans are invested in the stock market, and that’s actually low in comparison to historical trends. In 2007, it was 65% and in 2002 it was 67%. And remember, that’s just counting people who are invested in publicly-traded companies. The percentage is much higher, I’m sure, if we start counting people who invest in privately-held business ventures.
And we should want Americans investing. Investments are what provide the capital that, in turn, leads to more business development and more jobs. Treating the capital gains tax as though it were a tax only on rich Wall Street types is ludicrous. A lot of Americans are invested in the stock market, from retirement accounts to venture capitalists, and raising the capital gains tax on investment and dividend income hits all of them not just the “very wealthy” as politicians like Conrad would have us believe.
Not only would a dramatic increase in the capital gains tax, as Conrad and other Democrats are touting, hurt more than just “very wealthy” it would hurt American investment in general.
If we tax investment income at higher rates we’re going to get fewer investments.
Don’t we want more investments in our economy right now?Tags: capital gains, deficits, Kent Conrad, national debt, Taxes