You Pay More Than Billionaires In Taxes On Capital Gains

Besides whale bone back-scratchers, one of the best parts about being rich is that you make money because you're rich. In 2008, the 400 wealthiest taxpayers made 60 percent of their income in the form of capital gains (profits from investments), and 8 percent in salary and wages. Meanwhile, the rest of the country made 5 percent in capital gains, and 72 percent in salary and wages. Under the current tax code, billionaires pay less than anyone making more than $34,500 in wages on capital gains earnings. This is because, as one Yale professor tells WaPo, “the amount of lobbying that takes place on tax policy from the deep-pocketed interests that have the most at stake is enormous." Maybe all those unemployed people should just become lobbyists?

According to the article, "over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people." Wait for the money quote to light your molotov cocktail! "About half of all the capital gains have gone to the wealthiest 0.1 percent." If this isn't justification for our long-ignored proposal for "National Key A Porsche Day," what is?

"The way you get rich in this world is not by working hard," an economist with Tax Analysts says, "It's by owning large amounts of assets and having those things appreciate in value." It also helps to own the politicians who make the rules, especially Republicans, who treat lowering or eliminating capital gains taxes as a "theology."

Five Republican 2012 presidential candidates support eliminating capital gains taxes. Today, as Obama proposes closing tax loopholes on those who earn more than $200K a year to pay for his jobs plan, he makes no mention of capital gains, probably because he doesn't want to hurt the GOP's feelings (and keep campaign cash of his own flowing from wealthy donors).

But don't worry, top 0.1 percent! The GOP is looking out for you. Boehner's spokeman released a statement condemning ANY tax increases:

“It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit.”

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Christopher Robbins in News on September 12, 2011 4:38 PM

Comments [rss]

Mordicai

If we don't let the plutocratic feudal class do whatever they want...then...we'll be...Russians! Crap, I'm bad at Right Wing rhetoric, but I think that is a pretty good recapitulation of it, right?

BottomlessChips

You are advocating for a race to the bottom.

Furthermore, how do we implement this systematic level playing field in public policy? We make every child learn from government made computer programs? Parents cannot teach their kids; they can only use this government computer education program! Teachers cannot be better than another teacher. School districts cannot strive to be better than another district. Parents cannot spend money on their child for luxury items, like overnight camp, tennis lessons, swimming lessons...those are plutocratic.

You'll call this rhetoric, but I want to know what your policies would be to have this level playing field.

Mordicai

No, I'm advocating a race to the middle. I can't understand what is so complicated about it-- if a bunch of feudal barons & dukes got together & were like "ensuring the social organizations that stratify society into nobles & serfs is only rational! Without it it would just be a race to the bottom & we'd ALL be serfs!"

BottomlessChips

Ah the race to the middle...where no one can excel and succeed. Everyone gets a ribbon of participation.

winning1234

I wonder if Chris Robbins knows the difference between short term cap gains and long term cap gains. The incentive structure is so ppl make long term investments in companies instead of making speculative, short term, frequent trades/investments. We seriously have to stop villifying the rich. The most efficient use of capital comes from smart people, and rich ppl are rich generally because they are smart. Taxation is essentially a redistribution of wealth from a more efficient user of the capital to a more inefficient user (i.e., the govt or poor ppl who are less educated). I guess the question is would you invest $1 in BRK or $1 in USPS? You decide.

bggb

rich ppl are rich generally because they are smart.

This would be simplistic writing for a middle school essay.

Reality is: class mobility in this country is almost non-existent.

Most rich people were born rich.

The end.

winning1234

Well, if you were born rich you got a higher quality education, better resources and generally your parents cared for you more. So I guess you are right.

Mordicai

It was sooooo smart of them to be born to rich parents! God I wish I wasn't such an idiot.

BottomlessChips

Most millionaires do not "come from money."

Moreover, is it a bad thing if they did? Should it really surprise you? How many pro athletes have kids that are also pro athletes? God forbid the parent taught his kid how to hit a baseball. He shouldn't have shared his knowledge of the game! Rich, educated parents should not share their knowledge or math, reading and science to their kids too. It's unfair to those who do not have smart parents.

Stop this madness.

Mordicai

Your social darwinism is pretty quaint but a little bit out of date!

Also, uh, dude, you just made a really good argument for robust public education.

BottomlessChips

How is it out of date? If you believe in evolution, you should be able to understand the point.

And, uh, no. I didn't. I made the point for education...not public education. In practicum, your "robust" education policies have created one of the most expensive systems with average results...kind of like US health care.

Mordicai

Uh, okay, I'll bite. It is out of date because since the 19th century "Social Darwinism" has been shown time & time again to be an excuse used by those in power to oppress those who aren't in power, & displays a pathetic misunderstanding of evolution-- as an upward directional arc-- that shows the one claiming it as a meaningful argument as a moron who doesn't understand the basic fundamentals of a) his own argument b) biology c) the metaphor between the two & d) history.

I hate to go Godwin here, but there is a reason that nitwits like the Nazis were big fans of it. Or, you know, segregationist leaders & other prominent racists. Are you arguing-- let me get this straight-- that rich people are rich because they have skills from their rich parents & natural talents from their naturally talented parents-- & that is why they are rich? Patterns of inherited wealth have nothing to do with it! Huge coincidence! & social injustice? No such thing! It just LOOKS that way to lazy communists! Totally an even playing field!

The argument that good things happen to good people because they are magically naturally good-- hey, you were born a straight white Christian cigendered male to wealthy parents, congratulations, you are naturally better!-- is a thinly veiled piece of ideology prepared by hegemonic perpetrators of colonialism & subjugation. Not metaphorical colonialism or metaphorical subjugation-- real actual stuff.

I don't know how to break this to you, but institutional patterns of bias & racism aren't "Social Darwinism." Darwinism only cares about two things-- are you pretty enough to have sex with me & are you still alive? One thing it REALLY doesn't care about is an individual. Human beings are very clever apes. Could you argue that racism is predicated in part on an attempt to keep your gene pool homogenous? Maybe! Fun fact-- homogenous gene pools suck! & guess what? Within a pool of white folks? There is as much genetic diversity as there is between a random black person & a random white person.

Why am I stuck on all this talk of race? You didn't mean race, did you? Too bad! Social Darwinism is inextricably linked with race, as it class & wealth in the Western world. Sorry, it sucks, but let me be super clear-- a white kid in a private school paid for by his wealthy parents & a black in a shitty public school that just had another round of teacher lay offs? They don't have appreciable measurable genetic differences. Or cognitive differences. What they do have is an inequality of choices, options & opportunities.

& that is why Social Darwinism is stupid, & why you don't hear anybody except middlebrow Randroids bringing it up. Because as a philosophy it has been thoroughly debunked & thoroughly shown-- time & time again-- to be a claptrap rattled by those who want to do harm to others so that their lazy lives don't have to change.

m015094

"The top 1 percent is comprised of just 1.4 million taxpayers and they
pay a larger share of the income tax burden now than the bottom 134
million taxpayers combined."Read more: http://atr.org/top-percent-pay...

But, if you want to fix it, this really isn't that difficult. Just add capital gains to adjusted gross income and then tax progressively like the rest of income tax.