Source: NCPA
Increasing the capital gains tax would hurt earners at all income levels, according to a new report by National Center for Policy Analysis Senior Fellow Pam Villarreal.
“It’s easier to pass a capital gains tax increase than an ordinary income tax increase. Why? Because people are often under the impression that capital gains taxes are only a problem of the wealthiest,” says Villarreal. “Hiking the tax on capital gains, the amount by which an asset’s selling price exceeds its purchase price, won’t just affect the wealthy. Capital is what makes the economy grow and helps create jobs.”
Though President Obama’s 2016 budget proposes increasing the capital gains tax to 28 percent for couples earning $500,000 or more, the president has already raised taxes on high-income individuals several times. In 2013 alone, the Obama administration added:
- A 39.6 marginal tax rate for the highest-income households,
- A 0.9 percent Medicare tax on individuals earning above $200,000, and
- A 3.8 percent Medicare tax on unearned income in excess of $200,000.
All together, the effective average tax rate on capital gains for a household in the highest tax bracket increased from 15 to 23.8 percent.
“Capital gains taxes apply to any asset, whether it be a stock purchase, real estate or an investment into starting up a business,” warns Villarreal. “Increasing thecapital gains tax would mean less financing for small businesses and entrepreneurs.”
Obama’s Proposed Capital Gains Tax Hike: http://www.ncpathinktank.org/pub/ba808