Nobody ever clicks on blog posts about tax policy, because it’s not “sexy” enough. Fuck you! How else are we supposed to win the class war?
Look at this Dissent story by Julia Ott. It’s good. It delves into (surprisingly racist!) history to explain why capital gains—money that people earn from investments—is taxed at a significantly lower rate than regular income that people earn from their labor. It is staggering and disgusting that America, with all of our “hard work” rhetoric, has for decades zealously protected a system that taxes money people earned from sitting on their ass doing nothing less than money people earned from working. The capital gains tax rate is an outrage on its face and exposes much of what conservatives say as a farce and I can only assume that the reason it is not an enormous issue in each and every election, as a primary driver of economic inequality, is that it has been the case for so long that people have become used to it.
Don’t get used to it because it’s fucked up. Every time you see someone who makes most of their money from investments—which is to say, a very wealthy person—remember they are paying a lower rate on that than you are, even though you fucking work for your money.
It’s not cheap:
In 2016, for example, nearly 76 percent of all capital gains went to households earning more than $1,000,000, according to estimates by the Tax Policy Center. And 96.2 percent of the households in the top 1 percent of the income distribution are white. Preferential treatment for capital gains meant that the federal government forewent $109.5 billion in taxes in 2016, a giveaway second only to the tax exclusion for employers’ contributions to employees’ health plans.
There is lots of talk about “comprehensive tax reform,” which is mostly a term that Republicans use to mean “tax cuts for corporations and the rich.” But consider what our nation could do just by taxing capital gains at the same rate as regular income, without any other changes to the status quo. What could that extra $109.5 billion a year accomplish?
- It could fully fund a ten-year, trillion-dollar infrastructure program of the sort that both Democrats and Republicans talk about wanting, with no private revenue necessary.
- It could solve America’s worst state pension crisis in one year.
- It could pay for free tuition for every public college and university student in America and still have enough left over to build a national missile defense system (now there is a bipartisan deal).
- It could fund the entire budget of the State Department and the Labor Department, and still have enough left over to purchase every NFL team except the Jaguars and shut them down, so the Jaguars would win the Super Bowl, by default.
Just a few ideas. Of course, we must be measured in our approach. Is it really fair to tax capital gains at the same rate as the money you worked for? No. It should be taxed more. You didn’t work for it! But we can build up to it.