In an article by Paul Krugman, Paranoia of the Plutocrats, he writes:
"Between the partial rollback of the Bush tax cuts and the tax hike that partly pays for health reform, tax rates on the 1 percent have gone more or less back to pre-Reagan levels."
But is this true? See the historical record for capital gains taxes, because that's how most of the top one percent make their money—with capital gains on stocks, real estate and SWAG investments (silver, wine, art and gold).
In 2011 Bruce Bartlett (once a senior policy analyst for Ronald Reagan) wrote an article at
The Fiscal Times, 7 Top Republicans Who Taxed the Super
Rich. Here he writes: "Republican Gerald Ford supported the Tax Reform Act of
1976, which raised the minimum tax and further restricted tax loopholes for the wealthy."
In 1977 (during Jimmy Carter's first year of office) the tax rate was 39.9% on capital gains (not subjected to Social Security taxes); but that rate has since fallen (just like NASA'a budget).
The tax rate on capital gains went down from 28% to 20% under Bill Clinton, then it went down again to 15% under George W. Bush in 2003. The Bush tax cuts weren't set to expire until the end of 2010.
Politifact: "President Obama said Republicans were holding tax cuts for the middle-class 'hostage' to get tax rates for higher earners continued. So Obama agreed to continue the current tax rates for everyone, regardless of income [until the end of 2012]. Additionally, Obama won another year of unemployment benefits for workers who qualified." (True)
In other words, three years ago the GOP had agreed to extend unemployment benefits for one more year (even though they weren't "paid for" with cuts elsewhere) — but then, only in exchange for two more years of low capital gains taxes for the very rich.
Washington Post: "The package, brokered by Obama and Republican leaders in the wake of the November elections, angered many Democrats, who have long argued that the Bush tax cuts were skewed to benefit the wealthy."
Then the tax rate on capital gains went back up to 20% at the beginning of 2013; but they also had an additional 3.8% surtax added to expand Medicaid under Obamacare on long-term capital gains (on realized gains after one year). This is the tax hike that partly pays for the health reform that Krugman mentioned. (And Forbes tells us how to beat this tax.)
Today in 2014 the top marginal tax rate on regular wages is 39.6% and is also subjected to Social Security taxes (up to $113,700) --- whereas, capital gains is now taxed much less, at 23.8% (and is not subjected to any Social Security taxes). But "effective" tax rates on capital gains (just like with corporate taxes) have proven to be even lower.
So did the tax rates on the 1 percent really go up "more or less" back to pre-Reagan levels as Paul Krugman said?
And could that 3.8% surtax on capital gains (to expand Medicaid for the unemployed and working-poor) be the REAL reason why the Koch brothers-backed Tea Party, the Republicans, their think tanks (such as the Cato Institute and the Heritage Foundation), and their lobbing groups (such as the U.S. Chamber of Commerce and the Business Roundtable) have spent so much time, energy and money trying to demonize and repeal Obamacare?
If not, then why did the Republican presidential hopeful (and CNN Crossfire host) Newt Gingrich take the time in 2009 to co-author an article making an argument to repeal the capital gains tax entirely (long before repealing the non-existent Obamacare).
Is all the fuss about Obamacare really about the 3.8% tax on the richest 1% to help provide healthcare for the poorest 47%? And would that be so unreasonable if 50% of all working Americans (who earn "regular wages") take home less than $28,000 a year and pay Social Security taxes on 100% of their wages?
From a man who may have over $100 million in untaxed money sitting in a "retirement account"...
"There are 47%...who believe that they are entitled to health care, to food, to housing, to you-name-it."
It all depends on what the definition of "entitled" is. Did he mean, would it be unreasonable for someone to want an income that would be sufficient enough to provide them with health care, food and housing? Let's ask the Pope—he may have an answer to that question.