Pelosi Bill Has a 69% Capital Gains Tax Hike
House Democrats are funding their new entitlement with a 5.4% surtax on incomes above $500,000 for individuals and above $1 million for joint filers.
That surtax takes effect on January 1, 2011, or the day the Bush tax rates of 2001 and 2003 expire. Today’s capital gains tax rate of 15% would bounce back to 20% because of the Bush repeal and then to 25.4% with the surtax. That’s a 69% increase, overnight.
Expect less revenue for the Treasury, not more, and less investment in the economy. Full Wall Street Journal editorial here.
It seems like we have always been on the wrong side of the Laffer Curve when it comes to capital gains. Higher cap gains tax rates cause less revenue for the Treasury and vice versa.
There is nothing worse than taxing capital to pay for consumption. And in this case, we are talking about very wasteful consumption.
The left wing of the Democratic Party has always believed in taxing capital. It’s as though they dedicate their lives to refuting economic theory.
What’s truly bizarre about this is that most of the members of Congress are millionaires. And Nancy Pelosi is really rich. Do you suppose they are getting special tax breaks the rest of us don’t know about?