Nation needs higher capital gains tax
To the editor:
A fundamental imperative of negotiations over avoiding the “fiscal cliff” should be raising the capital gains tax rate. It is patently unfair to tax income derived from investments at half the rate of income derived from work.
The only possible justification would be if low tax rates on capital gains had a big positive effect on economic growth, benefiting everyone. However, there is no evidence of such an effect. A recent report from the Congressional Research Service reminds us that the capital gains tax rate was much higher in the 1950s, 60s, and 70s. Yet economic growth was higher than it has been over the last decade with lower capital gains tax rates.
The capital gains tax is so low because the rich have the influence to get Congress to reduce it solely for their benefit. Fortunately, though, not all the wealthy are averse to paying a fair share of taxes.
If Congressional Republicans refuse to agree to raise the capital gains tax, President Obama should not compromise. Let Republicans hurl us over the cliff, showing that keeping taxes on the very wealthy very low is their only priority.