Great blog posts by our colleague Jared Bernstein and by Syracuse University professor Len Burman explain why the preferential tax treatment for capital gains — the gains from selling stocks, bonds, and other assets, which face a top tax rate of 15 percent, well below the top rates for ordinary income — is unjustified.
In two posts, Bernstein demonstrates that there is...
off the charts
POLICY INSIGHT
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Tax Preference for Capital Gains Doesn’t Make Sense
January 23, 2012
OECD: Tax and Spending Policy Can Push Against Rising Inequality
December 13, 2011
A number of reports on the recent income inequality study by the Organisation for Economic Co-operation and Development (OECD) have highlighted the finding that the United States ranks fourth in inequality among OECD countries. This ranking uses the “Gini” index of the distribution of “market income” —...
Senate Balanced Budget Amendment Goes Far Beyond European Budget Rules
December 6, 2011
The Senate will vote this month on a constitutional balanced budget amendment that would require a balanced federal budget every year, regardless of the state of the economy, unless two-thirds of the House and Senate overrode that requirement. While some proponents point to balanced budget requirements in some European countries as evidence that the United States should adopt one, too, no...
Why the Tax System Is Doing Less About Growing Inequality
November 4, 2011
As we have explained, the joint congressional “supercommittee” — and any future efforts at deficit reduction — should raise significant revenues, and do so progressively. A recent Congressional Budget Office (CBO) report highlights why.
It shows not only that income inequality has dramatically increased in recent decades (a point that we have previously discussed), but also that “the increase in inequality of after-tax income was greater than the increase in inequality of before-tax income.” That is, the federal tax system as a whole did less to equalize the distribution of income in 2007 than it did in 1979.
Congressional Research Service Confirms: “Current U.S. Tax System Violates the Buffett Rule”
October 13, 2011
When President Obama enunciated the so-called “Buffett Rule”— that millionaires shouldn’t pay lower tax rates than middle-income families — he raised an obvious question: how many millionaires are we talking about? A new study by the Congressional Research Service (CRS) concludes: