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The Tax Issue 2/16/2004 9:44:53 AM
The Political campaigns are upon Us, and this time Tax policy will be a major issue. This is a current evaluation of the problem.
Capital Gains generally range about 50-70% in amount to Labor income earned by working people. Historic rates for Capital Gains generally produced about one-third of the tax revenues coming from Personal Income taxes. The Bush Tax Cuts reduced the Capital Gains rates to a level equal to the lowest Tax Bracket rate for Personal Income which was taxable (contestable: some Capital Gains pay only 5%, some 15%). Capital Gains used to bear about one-quarter of the federal tax burden, but now delivers only about one-tenth of the total revenues, and Corporate Income derives enough exemptions as to pay only a like amount to Capital Gains revenue. Personal Income tax revenue is designated replacement for all these tax remissions.
The Bush Tax Cuts introduced deliberate discrimination against Labor Income. All Capital Gains Payees pay only the lowest rate levels of Personal Income, so equivalent Income earned by Labor pays three times the rate as Dividend collectors. Most Economist claim Income Tax holds personal exemptions and ability to invest in 401k etc., so that the actual rate is much lower than the legal, stipulated rate of Income tax. Truth states the above advantages negate after about $56,000 of Income, with Investors paying no higher rate at this time, nor any time thereafter; while Personal Income tax rates triple. This is the great advantage of the Bush Tax Cuts. lgl
