The Top 0.1% Of The Nation Earn Half Of All Capital Gains

The link http://www.forbes.com/sites/robertle...capital-gains/


Capital gains are the key ingredient of income disparity in the US– and the force behind the winner takes all mantra of our economic system. If you want even out earning power in the U.S, you have to raise the 15% capital gains tax.

Income and wealth disparities become even more absurd if we look at the top 0.1% of the nation’s earners– rather than the more common 1%. The top 0.1%– about 315,000 individuals out of 315 million– are making about half of all capital gains on the sale of shares or property after 1 year; and these capital gains make up 60% of the income made by the Forbes 400.

It’s crystal clear that the Bush tax reduction on capital gains and dividend income in 2003 was the cutting edge policy that has created the immense increase in net worth of corporate executives, Wall St. professionals and other entrepreneurs.

The reduction in the tax from 20% to 15% continued the step-by-step tradition of cutting this tax to create more wealth. It had first been reduced from 35% in 1978 at a time of stock market and economic stagnation to 28% . Again 1981, at the start of the Reagan era, it was reduced again to 20%– raised back to 28% in 1987, on the eve of the October 19 232% crash in the market. In 1997 Clinton agreed to reduce it back to 20%, which move was an inducement for the explosion of hedge funds and private equity firms– the most “rapidly rising cohort within the top 1 per cent.”

Make no mistake; the battle that is to be fought over the coming attempt to reverse this reduction in capital gains will be bloody and intense. The facts are clear according to the Congressional Budget Office more than 80% of the increase in income inequality was the result of an increase in the share of household income from capital gains. In fact, you can go so far as to claim that “Capital Gains income is the most unevenly distributed– and volatile– source of household income,” according to Laura D’Andrea Tyson, University of California business professor and former chairwoman of the Council of Economic Advisers under President Clinton.

No wonder the super wealthy plutocrats obtained the largest share of national income– 25% of the nation’s wealth- greater than any other industrial nation in the the period of 1979 to 2005. Make no mistake; after unemployment– this disparity between the 1%– 3 million– or the 0.1%– the 300,000– and the other 312 million citizens of the U.S. has become the major theme of the Occupy Wall Street movement– and an important national debate.

I commend you to the late Justice Louis Brandeis warning to the nation that ” We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” We have to make up our minds to restore a higher, fairer capital gains tax to the wealthiest investor class– or ultimately face increased social unrest.

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This country is not a democracy. It is a republic. We live under a constitution. No matter how many times liberals lie about this simple fact it doesn't change the truth.

When Ben Franklin was leaving the constitutional convention, he was asked by a woman, "What kind of government have you given us Dr Franklin?" Franklin responded, " A republic, if you can keep it." Liberals like your self have been steadily chipping away at our constitutional republic, trying to change it into a defacto democracy for a long time.

The founding fathers understood that democracies can not endure because the majority of the people will always vote to loot the treasury. The actions of the federal government must be limited by a constitution; otherwise, you're left with mob rule.

Just because the majority of the people (the ninety nine percenters) envy the rich it doesn't give them the right to steal their wealth.

Voting for liberal Democrats that would confiscate the wealth of the minority and redistribute to he majority is theft by proxy. The progressive income tax is no more legitmate than someone breaking into your house and taking your possesions, simply because you have more than them.

I couldn't care less that some one else has more money than me. It's none of my business. Poverty is not caused by rich people. It is not a zero sum game.

Even I was surprised how skewed this was. Taking the tax rates on capital gains back to a sane level has to be a top priority if we're going to get the economy back on track.

The capital gains tax should be 0.0%. Raising the capital gains tax is so detrimental to economic growth that it doesn't even increase revenue.

Watch the video I've linked to, its very informative.

http://www.youtube.com/watch?v=_yXINN1tD54

Even I was surprised how skewed this was. Taking the tax rates on capital gains back to a sane level has to be a top priority if we're going to get the economy back on track. Originally Posted by TexTushHog

What is a sane level, TTH?

What is a sane level, TTH?

Originally Posted by CuteOldGuy

The same rate that people pay in normal taxes.

So that amount is fair? What are those amounts? Are you suggesting that we not change the tax rates? And what are normal taxes? Why are they considered normal?

Are you guys aware of the rather pronounced inverse correlation between capital gains realizations and the top tax rate on cap gains?

Not an easy question. But I would suggest a two or three tiered approach. First, you want to encourage investment and savings for people of relatively modest means. So lets exempt the first $5,000 or $10,000 of capital gains and the first $5,000 or $10,000 dividend income from any taxation, like we do municipal bond income. Then, maybe we have a second tier, say $5,000 - $15,000 that is taxed at a somewhat preferential rate --- say 20 or 25%. Then everything over $15,000 of each is taxed at ordinary income tax rates. And I'd like to see the revenue numbers, income level of people effected, etc. before I made those decisions. But it makes no sense to tax Bill Gates and Warren Buffett capital gains income at preferential rates.

So that is fair. Everyone agree?

Is the point of the post to complain that someone else has something you don't? Or that someone else is smarter, better looking, and has a bigger schong? It seems the poster is whining because his life is unfair or someone's life is unfair. Kind of like "Occupy" crap. Boo hoo. Someone is better off than me. Boo hoo.

Here's a tip. Life isn't fair, quit worrying about what the other guy has and do whatever you can to make your life better and stop whining. It's ladylike but not very manly.

+1

Fans of boosting cap gains tax rates to high levels (35% or higher) should take a look at the history of the period (from about 1970-78) when rates were that high, and consider the rather obvious adverse consequences of imposing high rates on capital gains. There is obviously disagreement over the degree to which "lock-in" effect occurs in the real world, and the extent to which the rate affects capital formation over the long term, but few analysts believe these factors to be insignificant.

This CBO report from 2002 covers a few of the key points:

http://www.cbo.gov/doc.cfm?index=3856&type=0

The top tax rate on capital gains was 25% for many years prior to about 1968, even though the top bracket rate on ordinary income was as high as 91% (although hardly anyone actually paid tax at that rate).

Europe's social democracies also tax capital gains at significantly lower rates than ordinary income.

There are very good reasons for that.

Except it's not FAIR! Dammit! It's not FAIR!