Joe Scarborough: Hey, Let’s Raise Capital Gains Taxes On Uber-Rich

While we’re at it, why not take away all the amortization and other breaks companies receive? Let’s nail them with higher taxes, especially companies like Progressive Insurance, General Electric, and Heinz. Take away all the breaks for the sports and entertainment industries

(Politico) The Oracle of Omaha came on the show yesterday and promoted his plan to impose a minimum 30 percent tax on millionaires and billionaires. Warren Buffett said such a tax was necessary because fully a quarter of the 400 richest Americans (who averaged $200 million in income) paid a tax rate of less than 15 percent – and six of those super-rich individuals paid nothing at all.

The reason they pay those percentages is because many don’t actually have much earned income. Some have none. Hence, low tax rates. Plus, they are also able to make massive charitable donations, reducing liability. Anyhow, that’s why so many of those rich liberals advocate to raise their income tax rates. They aren’t worried about it.

FOMJ (Friend-of-Morning-Joe) Steve Rattner has also called for similar increases in tax rates for the ultra-wealthy, with particular emphasis on the capital gains tax and dividends rate. As Steve noted in his New York Times oped, “We need at least $4 trillion of long-term debt reduction, with a substantial portion – on the order of $1.2 trillion – coming from new revenues.”

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What we really need is about $16 trillion in debt reduction, and, oh, to pay for the unfunded liabilities, which is somewhere between $75 and $200 trillion dollars.

Mr. Rattner advocates a top capital gains rate of 28 percent.

That’s the rate paid during much of the Clinton years, till it was lowered to 20% in 1997. I say, let’s do it. Let’s put all those rich liberals on the hook. Let’s watch them squeal when they realize that their talking points regarding raising their taxes has come home to roost.

If politicians really want to make millionaires and billionaires pay at a tax rate that most of us endure on April 15th, their moral pangs would be soothed more effectively by following Buffett’s minimum tax plan or focusing on raising the tax rates on capital gains and carried interest. As Mr. Buffett told me yesterday, the richest Americans won’t be affected by the President’s plan to push the top marginal income tax rate back to 39.6 percent. It may be a great punchline on the campaign trail, but hiking the top rate will do little to impact the richest of the rich.

Buffet knows that an income tax increase would mean nothing. Raise his capital gains tax? Big.

Would this mean more revenue into the treasury? Depends on how these “evil rich” people respond. Do they invest more and work their portfolio’s to make up for the lost income? Or do they hold back and shelter it? Not cash in their stock? Move it overseas? Not invest in new businesses?

And the second question is, does anyone believe that the government would do anything other than spend any new revenues instead of using it towards debt and deficit reduction?

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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