“Give ’em an inch and they’ll take a mile” doesn’t apply anymore. Now, it’s better to say, “Give the rich trillions of dollars in tax cuts, and they’ll demand hundreds of millions more.” Columnist hiltzikm on GOP senators' demand for another tax cut:
Some people are never satisfied.
A few things about this. First, to say that capital gains taxes ignore inflation is a lie. The effect of inflation is embedded in the capital gains tax system in several ways: The tax rate is lower than the rate on ordinary wage income — the top rate is 20%, plus a 3.8% surcharge on investment income on taxpayers with income above $250,000, compared with a top tax rate of 37% on ordinary wage and salary income.
Lastly, even more than the 2017 tax cut, this one would be almost exclusively a rich person’s gimme. The top 1% would collect more than 86% of the benefits, according to a 2018 analysis by the Wharton School; the bottom 90% would get 2.5% of the benefits. The change wouldBefore we get into the niceties of the Republicans’ argument for another tax cut, here’s a bit of context.
The idea of indexing capital gains to inflation has been floating around for decades, pushed mostly by the right-wing anti-tax lobby. It tends to bubble to the surface when there’s a Republican in the White House or the prospect of one. It was bruited about, for example, in 1992, during the George H.W. Bush administration, and again in 2012, when there were hopes that Mitt Romney would win election over Barack Obama.
Because Congress, especially a Democratic Congress, was perceived to be a roadblock, the idea of indexing capital gains typically was tied to the idea of making the change without congressional authorization. A sizable library could be filled with law journal articles arguing pro and con, but one of the more straightforward debunkings of the notion came from George H.W. Bush’s attorney general.
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