Would you rather see the capital gains rate go to 25% or...?

[kentuck]

the income tax rate on the wealthy go to 39%?

At the present time, most of the truly wealthy pay the tax rate of 15% or less. Most of their money is in capital gains investments.

However, we hear very little about this. Mostly we hear about the top rate going from 36% to 39% on those making more than $250,000 per year.

But if the capital gains was taxed at 25% instead of 15%, the wealthy would be paying a lot more in taxes from their capital gains than from a measly increase in the top income tax rate.

Shouldn't we be talking more about raising the capital gains rate and less about raising the income tax rate. since they have their money in capital gains?

It's like moving around a peanut shell on a table. Don't look at the shell under the bucket...

[louis-t]

1. Both.

[rfranklin]

2. "Unearned income" should be taxed at the same rate as earned income according to your bracket...

The special treatment for capital gains is specious and on the level of the "job creators" meme.

[kentuck]

4. I would agree..

But I would settle for 25% at the moment.

[denverbill]

10. +1

[HooptieWagon]

15. Are you referring to unrealized capital gains,

or income that is not wages/salary?

[rfranklin]

20. Realized income...

Investopedia explains 'Unearned Income'
Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. As long as this income is "realized" then it is taxable.

Read more: http://www.investopedia.com/terms/u/unearnedincome.asp#ixzz21aDAmWw6

[HooptieWagon]

22. Then I would agree with you.

Were you referring to taxing appreciation, then I would disagree most vehemetly.

[Zen Democrat]

3. Both.

[PDJane]

5. Tax capital gains as income, on a progressive basis.

[HooptieWagon]

17. +1, but....

See my post further down.

[lovemydog]

6. Both, but if I had to choose one

I'd say raise capital gains rate to 25%.

[sinkingfeeling]

7. I want all types of income taxed at the same rate, so let's go with 39%.

[The Magistrate]

8. Capital Gains Should Be Raised, Sir

And there should be progressivity to the rates of taxation for capital gains.

[HooptieWagon]

18. Agreed, and same for dividends.

See my post further down.

[Make7]

9. "The total effective rate on capital gains would then be 25 percent."

[div class="excerpt" style="border: 1px solid #bfbfbf; border-radius: 0.4615em; box-shadow: 3px 3px 3px #bfbfbf;"]Donald Marron at the Tax Policy Center reminds us that taxes on capital gains are scheduled to increase in 2013, whether the Bush tax cuts are extended or not. He points out that the Democratic health reform law also contains a little noticed tax hike on the investment income for wealthy Americans that will take effect on Jan. 1, adding 3.8 percent to the capital gains tax rate, which is currently 15 percent. Then, if the Bush tax cuts aren’t extended, the regular capital gains rate will rise to 20 percent, and another obscure provision will reduce the value of itemized deductions, adding 1.2 percent. The total effective rate on capital gains would then be 25 percent.[font style="font-size:0.8462em;"]


http://www.washingtonpost.com/blogs/ezra-klein/post/capital-gains-tax-scheduled-to-rise-sharply-in-2013/2012/01/25/gIQAtQUuQQ_blog.html[/font]

[joeglow3]

11. I would be interested in seeing the numbers

In all the tax returns I did for millionaires, there were a lot getting most of it from capital gains. However, the majority were getting it taxed at ordinary rates from their k-1's from the businesses they owned.

[doc03]

12. Here is some food for thought the money people make from their IRAs

and 401Ks comes mainly from capitol gains but when you take your distributions you pay tax as regular income.
So the middle class even gets screwed there by the 1%.

[cbdo2007]

13. Only for rich people. No sense raising my capital gains rate and all of the other average investors

to 25%. That's our retirement income.

[HooptieWagon]

14. Dividends and short term capital gains should be taxed same as wages.

Long term capital gains should be adjusted for the length of time the asset was held, then taxed same as income. This serves several functions. It differentiates between a retiree with a modest income from investments vs a wealthy 1%er. It eliminates hedge fund managers and the like from using the loophole of transfering a high tax rate salary to a low tax rate dividend. It also would tax the capital gains of a long-term homeowner at a lower rate than a house-flipper. In summary, retirees and other small investers would see a tax decrease, from 15% on down. 1%ers would see a sizable tax increase from 15% to the max rate. It might even be possible to reduce the max rate a little.

Not mentioned in the OP, but I'll bring it up: 50 years ago the max individual rate was 90%, yet individuals paid only 33% of Federal taxes. Corporate income taxes were the other 2/3. Now, despite the maximum individual rate being 35%, individual taxes are 2/3 of Federal tax revenue, and corporate only 1/3. The "taxed enough already" crowd really should be looking at those numbers... but I doubt Fox/Koch will show them.

[orwell]

16. There should be no capital gains rate...

...it's all income.

[Spike89]

19. Raise everything, but add "loopholes"

I'm aware that the term loophole is prejorative, but they are the carrot working with the stick (higher tax rates). We (progressives) certainly like to point out that tax rates were significantly higher in the past (90%+ under Ike) but ignore the reality that virtually no one actually paid that rate.

True progressive taxation allows businesses to grow and flourish because the money that is reinvested in labor and expansion would have otherwise been "lost" to taxes. The owners/shareholders can look at $1 billion in gross profits and choose between paying $900 million in taxes or reinvesting that money in payroll, (with generous tax credits for doing so). Get the balance right and the owner/shareholders get more of their $1 billion to keep, increase payroll (capacity), and probably still pay a fair share of federal taxes.

Follow the GOP model and there is no incentive for hiring anyone or improving factories and the uber-rich simply pocket the excess profit. It is a short term gain for them, but "short term" is relative and it will be their decendants that end up owning broken, under-funded businesses. That is one of the problems in the US right now - our tax code actually favors taking money out of a business over investing in that business.

In a sense, if the rates and policies were more progressive, some capital expenditures would and probably should result in lower effective tax rates. I don't want the billionaire's money, I just want that money to be used effectively. If it were, there'd be plenty for me and more than enough to maintain strong social programs.

[David Zephyr]

21. Both.

I think that what the President has proposed is fair and good.

[xchrom]

23. Both. Income is income. Nt