Tuesday, February 9, 2016

Clinton Tax Plan is “Pie in the Sky”

An article at the pro-Hillary Daily Kos has a post by Jon Perr gushing all over Hillary Clinton's tax proposal. He writes:

"As a share of their earnings, the Clintons give much more to charity and pay much more in taxes. And if candidate Hillary Clinton gets her way, she and Bill will be paying even more ... Candidate Hillary Clinton, it is clear, is determined to raise President Hillary Clinton's tax bill to the IRS.

Of course, this is total B.S. — First of all, chances are that Hillary and Bill Clinton have most likely already earned the bulk of their income in their lifetimes, so many of the new taxes Hillary proposes wouldn't affect them personally.

Hillary proposes a 4 percent surtax: taxing all income (not just wages and salary income) over $5 million. That makes it a surcharge and not just the creation of a new income-tax bracket.

She also proposes the "Buffett Rule" which requires people earning more than $1 million annually to pay at least a 30 percent tax rate. That would make all income, whether from capital gains or regular wages, subject to a 34% tax rate on all income over $5 million.

Most of our favorite billionaires earn most of their income from capital gains, which is currently taxed at 23.8% --- so the richest among us would get a 10.2% tax increase — before their tax attorneys find a mountain of deductions (but still, on it's face, it's better than nothing.)

But it's odd that individuals currently earning between $413,351 to $1 million a year in regular wages will still be taxed at a higher rate than the billionaires: from 35% to 39.6%

It should also be noted that Hillary’s separate plan for capital gains sort of contradicts her other aforementioned proposals.

Also, Hillary Clinton's tax plan would lower the estate tax threshold from $5.5 million (per parent) to $3.5 million, and raise the tax rate from 40% to 45%. But there's no mention of the "step-up in basis for capital gains" — the sheltering of capital gains during one's lifetime by not selling assets, and then leaving those assets untaxed to their trust-fund babies.

And people like the Clintons can also leave their money to their foundation, which is not subject to the gift tax. Of course, there are also other loopholes that the very wealthy can use to avoid estate taxes.

But in the end, it all comes down to zip, zero, nada --- it's all "PIE IN THE SKY" --- because it's not "PRAGMATIC" --- because a Republican congress will not raise any tax, no matter who is the next President — Hillary Clinton, Bernie Sanders or Donald Trump.

1 comment:

  1. In his victory speech, Sanders seemed to predict that the trail was about to get more difficult: “Every single day they’re throwing everything at me except the kitchen sink, and I’ve got a feeling that kitchen sink is coming soon.”

    Expect the media and the Clinton campaign to start going nuclear on Bernie Sanders very soon, as it's expected that the establishment will fight back to cling to their greedy power.