Local Gov’t Stories, Events
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Health Care & Environment
05.23 Environmentalists Are Ignoring the Elephant In the Room: U.S. Military Is the World’s Largest Polluter [Since Trump had the EPA's records on global warming and pollution destroyed—and thus reporting world-wide has nearly stopped, let's pick on the US Military]
05.23 White House proposes slashing funds to clean up toxic sites despite EPA's pleas [far worse than just being stupid]
05.20 Global Study Shows Americans Dying from Preventable Causes at Shocking Rates [“What a country!” —Yakov Smirnoff]
05.20 China claims breakthrough in mining 'flammable ice' [might greater release of methane to our atmosphere become a larger problem?]
News Media Matters
US Politics, Policy & 'Culture'
05.23 Trump's budget: major slashes to social programs – but $1.6bn for the wall [disgusting that this was proposed at all]
05.21 The small Texas city fighting to remain a ‘safe haven’ for immigrants [morally right & courageous]
Economics, Crony Capitalism
05.20 The Malta Files: How the smallest EU country became a haven for global tax avoidance [why can't we play nice together?]
05.23 Could an Islamic reformation prevent violent radicalisation in Egypt? [denied vital lives enmasse, angry youth rebel in the only way that has any effect]
05.23 Facebook flooded with 'sextortion' and revenge porn, files reveal [wake-up people, don't let kids 'play' here]
05.22 Big game hunter is crushed to death when an elephant he was hunting in Zimbabwe is shot and falls on top of him [a fitting death to an elephant killer]
05.21 UK needs more immigrants to 'avoid Brexit catastrophe' [who benefits from bad "conservative" policy?]
05.21 THE LIGHTS ARE GOING OUT IN THE MIDDLE EAST [we suggest enticing a solar panel and battery manufacturers to locate in your countries to diversify economies and create jobs. use solar to empower yourselves...]
05.21 Budget analysis shows some Australian women hit with effective marginal tax rates of 100% ["conservatives" are cruel to the poor and desperate everywhere, to protect themselves from higher taxes]
05.21 Venezuela: 50th day of protests brings central Caracas to a standstill [who does interventions for countries? could the UN help more?]
05.21 Brexit and the coming food crisis: ‘If you can’t feed a country, you haven’t got a country’ [fear-based nationalism will become a costly problem]
The Ideal Capital Gains Tax Reform
The tax code—which now makes no distinction between true investments in companies and personal investments in portfolios—should recognize and reward the difference.
Warren Buffett recently enraged the Right by chastising Congress for “coddling” millionaires and billionaires. In a widely quoted op-ed, he urged lawmakers to “raise rates immediately on taxable income in excess of $1 million,” including capital gains. Buffett is right, but not entirely. The ideal reform would make some capital gains tax-free.
President George W. Bush cut the levy on long-term gains to 15 percent. By comparison, the federal income tax alone is 25 percent on the wages of middle-class workers. Including payroll taxes and Medicare, income from work is commonly taxed at more than twice the rate as income from wealth.
Advocates of tax breaks on capital gains claim that investments in the stock market grow jobs and grow the economy. For all but a trace amount of the billions of shares that change hands every day, that’s patently not true. Almost none of the money that flows through Wall Street goes to companies or grows jobs; it simply grows portfolios.
Except for the exceptions.
Small companies with big dreams use initial public offerings (IPOs) to help make those dreams take root and flourish. Later on, companies sometimes issue secondary offerings that raise capital for further expansion.
Investing in offerings like these really does spur the economy. The money goes not into portfolios but to companies that put it to use and create jobs. The tax code—which now makes no distinction between true investments in companies and personal investments in portfolios—should recognize and reward the difference. Capital gains from true investments should become tax-free; capital gains from aftermarket investments should be taxed at the same rate as ordinary income.
Buffett’s call for higher taxes on ultrahigh incomes said nothing about taxing wealth income at the same rate as work income. For that we turn to the recent recommendations of two bi-partisan panels, and to a Republican icon.
Ronald Reagan’s Tax Reform Act of 1986 levied equal taxes on capital gains, dividends, and ordinary income such as wages. In exchange, Reagan won another round of marginal rate cuts and a reduction in tax brackets. His speech at the signing ceremony called the bill “a sweeping victory for fairness” and “the best job-creation program ever to come out of the Congress.”
Reagan’s tradeoff—lower marginal rates in return for equal taxes on all income—is strikingly similar to the one proposed by both of the blue-ribbon, deficit-reduction bodies that weighed in late last year. The chairmen's report of President Obama’s fiscal commission (Simpson/Bowles) and a plan from the Bipartisan Policy Center (Rivlin/Domenici) both called for lower marginal rates. Likewise, both came down in favor of equal taxes on all income.
In 2011, for the second straight year, a special bi-partisan panel has been charged with putting America’s fiscal house in order. The new Congressional “super committee” has an extra incentive: the deal that raised the national debt ceiling mandates across-the-board spending cuts unless ways are found to lower the 10-year deficit by at least $1.5 trillion.
The committee can borrow from Simpson/Bowles and Rivlin/Domenici. It can embrace Ronald Reagan. If it does, one provision that might re-emerge is the return of basic tax fairness: the same rates on capital gains, dividends and wages.
And while tax breaks routinely deserve to be taken away, there’s one exception that deserves to be put in place. Capital gains from investments in job-creating IPOs and secondary offerings should be made tax-free.
Gerald E. Scorse, who writes from New York City, helped pass a bill that tightens the rules for reporting capital gains. Mr. Scorse's stories are republished in the Baltimore Chronicle with permission of the author.
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This story was published on September 13, 2011.