In An Effort To Appease Liberals "Hungry" For Redistribution, Clinton Will Pledge To Raise Taxes
CLINTON IS EXPECTED TO REVERSE HER POSITION ON THE CAPITAL-GAINS TAX RATE TO APPEASE HER PARTY'S LIBERAL BASE
Today, Hillary Clinton Will Release A Policy Proposal On Capital-Gains During A Speech In New York City. "Instead, Clinton is said to propose multiple levels of long-term. For assets held at least two years, the tax would be more than 28 percent, the Wall Street Journal reports, up from today's 23.8 percent. If assets are held for five years, the rate would be lower than that. (We may learn how much lower on Friday, when Clinton is set to release a tax-policy blueprint.)" (Paula Dwyer, Op-Ed, "Clinton Would Complicate The Capital-Gains Tax,"Bloomberg, 7/23/15)
According To The Clinton Campaign, The Goal Is To "Change Behavior, Not Increase Revenue." "The campaign didn't estimate how much in additional taxes the proposal would raise. The official said the primary goal is to change behavior, not increase revenue." (Laura Meckler and John D. McKinnon, "Clinton To Push Revamp Of Capital-Gains Tax Rates," The Wall Street Journal, 7/20/15)
Clinton's Adjusted Rates Would Be Higher Than The 28 Percent Proposed Earlier Than Obama And Perhaps Be As High As The Regular Income-Tax Rate . "For those held just a little longer-likely two or three years-the current capital-gains tax rate of 23.8% for top earners would rise. The Clinton rate, which hasn't been finalized, would be higher than the 28% President Barack Obama proposed earlier this year for the highest earners … The Clinton campaign hasn't ruled out taxing such investments at the regular income-tax rate.." (Laura Meckler and John D. McKinnon, "Clinton To Push Revamp Of Capital-Gains Tax Rates," The Wall Street Journal, 7/20/15)
Clinton's Proposal Is A "Change Of Heart" From Her Previous Position On The Capital-Gains Tax
Clinton "Hinted" At Her "Change Of Heart" On Capital Gains Earlier This Year."Clinton, who will say on Monday that the best way to increase the size of the U.S. economy is to increase middle-class people's incomes according to her campaign, hinted at her change of heart on capital gains at a campaign event in April." (Luciana Lopez, "Clinton To Propose Capital Gains Tax Reform: Campaign Document," Reuters, 7/13/15)
Clinton's Plan "Appears To Be A Shift" From Her Position In 2008 When She "Vowed Not To Raise Capital Gains Tax Rates Above 20 Percent If At All.""Clinton's plan to revamp such rates appears to be a shift from her position in 2008, when she last sought the party's nomination and vowed not to raise capital gains tax rates above 20 percent, if at all." (Susan Heavey, "Clinton's Capital Gains Tax Plan To Urge Focus On Long-Term Growth," Reuters , 7/20/15)
- Clinton Said That She Wouldn't Raise The Capital Gains Tax Rate Above 20 Percent, "If I Raised It At All." ABC NEWS' CHARLIE GIBSON: "The question was about capital gains tax. Would you say, 'No, I'm not going to raise capital gains taxes?'" CLINTON: "I wouldn't raise it above the 20 percent if I raised it at all. I would not raise it above what it was during the Clinton administration." (Hillary Clinton, 2008 Democratic Primary Debate, Philadelphia, PA, 4/16/08)
During A 2008 Primary Debate Clinton Stood By Legislation Signed By Bill Clinton That Lowered The Maximum Taxation Rate On Capital Gains From 28 Percent To 20 Percent. "In a primary debate that year, she stood by legislation signed by her husband, Bill Clinton, in 1997 when he was president. That law lowered the maximum taxation rate on capital gains, which are the profits made on selling capital assets such as shares or real estate, from 28 percent to 20 percent. In 2003, the maximum rate was lowered further still to 15 percent under President George W. Bush." (Luciana Lopez, "Clinton To Propose Capital Gains Tax Reform: Campaign Document," Reuter s, 7/13/15)
Clinton Claimed She Was "Agnostic" About A Tax Rate Change On Capital Gains And Dividends That Was Enacted In 2003. BLOOMBERG ANCHOR: "Are there any of the President's tax cuts that you would maintain, let me ask you one specific, the 15 percent tax rate [on] capital gains and dividends, very important to folks on Wall Street right now, folks right now in your state." CLINTON: "Oh I know, I'm asked about it often, and, what I tell the people who ask me is look, I'm agnostic about that." (Bloomberg News' "Taking Stock," 3/15/07)
Clinton's Tax Hike Proposal Is Just Another Way She Is Trying To Meet The Demands Of Liberals Who Are "Hungry For Social Spending And Redistribution"
By Raising Capital Gains Tax Rates, Clinton Will Meet The "Key Demands Of Liberals Who Are Hungry For Social Spending And Redistribution." " By raising tax rates on medium-term capital gains, Clinton will raise a bunch of tax revenue, and she will raise it overwhelmingly from high-income individuals. These are key demands of liberals, who are hungry for social spending and redistribution." (Matthew Yglesias, "Hillary Clinton's Capital Gains Tax Reform, Explained," Vox, 7/20/15)
Clinton, In A "Pander" To The Left, Is Hoping To "Demonstrate To Elizabeth Warren's Fan Base That She Can Soak The Rich And Limit Wall Street's Winnings." "She wants to discourage short-term thinking (that's good), raise tax revenue to fund new government programs (unlikely), and demonstrate to Elizabeth Warren's fan base that she can soak the rich and limit Wall Street's winnings, too (a pander)." (Paula Dwyer, Op-Ed, "Clinton Would Complicate The Capital-Gains Tax,"Bloomberg, 7/23/15)
ECONOMISTS HAVE EXPRESSED "DEEP SKEPTICISM" TOWARDS CLINTON'S PLAN AND SAID IT WON'T BENEFIT WAGES OR IMPACT CORPORATE INVESTMENT
Former Senior Tax Economist For Bill Clinton's Administration, Lenoard Burman, Said His General Impression Of Clinton's Tax Plan Was "Deep Skepticism." "'My general impression is deep skepticism,' Leonard Burman, director of the non-partisan think tank the Tax Policy Center and a former senior tax economist in President Bill Clinton's Treasury Department, said in a telephone interview." (Jonathan Allen, "Clinton's Capital Gains Tax Plan Aims At Long-Term Investment," Reuters , 7/23/15)
- Burman: "I Don't See The Logic" In Clinton's Tax Hike Proposal. "'Frankly, I don't see the logic in trying to encourage people to hold assets for longer than they want to,' he said. He said there were already strong incentives for individuals to hold onto assets, and the dividends they can produce, for a long time. He also noted that vast amounts of assets are held by entities, including non-profits, foreigners and retirement funds, not subject to the individual capital gains tax. (Jonathan Allen, "Clinton's Capital Gains Tax Plan Aims At Long-Term Investment," Reuters , 7/23/15)
Empirical Studies "Struggle" To Confirm The Idea That Tax Rates On Investment Income Are An "Important Driver" Of Investment Activity. "Empirical studies also struggle to confirm the idea that tax rates on investment income are an important driver of real investment activity. A recent, statistically sophisticated study of the 2003 dividend tax cut by Danny Yagan, for example, finds that 'the tax cut caused zero change in corporate investment.'" (Matthew Yglesias, "Hillary Clinton's Capital Gains Tax Reform, Explained," Vox, 7/20/15)
"Changing How Things Are Taxed At The Investor Level Will Make No Difference At All" To The "Time Horizons Over Which The Corporations Will Invest.""Changing how things are taxed at the investor level will make no difference at all to that: nor will they make any difference at all to the time horizons over which the corporations invest. This is a non-solution based on an ignorance how the markets work. How unusual that Hillary should fall for it…"(Tim Worstall, "Hillary Clinton's Capital Gains Changes Won't Make A Blind Bit Of Difference To Short-Termism,"Forbes , 7/20/15)
Economists Christophe Chamley And Kenneth Judd Concluded That The "Socially Optimal Level Of Investment Taxation Is Zero" And That "People Who Derive All Their Income From Wages Benefit In The Long Run From Not Taxing Capital Income." "The economics-y reason is a result in theoretical macroeconomics stemming from work by Christophe Chamley and Kenneth Judd that shows that under appropriate assumptions, the socially optimal level of investment taxation is zero. The result involves a lot of math, but the intuitive idea is that the less you tax investments in capital goods, the more capital goods you get. And the more capital goods you have, the higher your wages will be. Consequently, even people who derive all their income from wages benefit in the long run from not taxing capital income." (Matthew Yglesias, "Hillary Clinton's Capital Gains Tax Reform, Explained,"Vox, 7/20/15)
Clinton's Capital-Gains Tax Rate Hikes Are "Not Going To Make A Blind Bit Of Difference" In Countering The Short Term Nature Of Decision Making In The Marketplace. "The aim being to make people invest for the longer term, and counter what is seen as the dreadfully short term nature of most decision making in the marketplace. It's not going to make a blind bit of difference of course for the suggestion itself ignores a very basic economic fact about investment markets: they are forward looking." (Tim Worstall, "Hillary Clinton's Capital Gains Changes Won't Make A Blind Bit Of Difference To Short-Termism," Forbes , 7/20/15)
