Marco Rubio’s tax plan gives a huge gift to the top 0.0003 percent

[applegrove]

Marco Rubio’s tax plan gives a huge gift to the top 0.0003 percent

By Jared Bernstein at the Washington Post

https://www.washingtonpost.com/posteverything/wp/2015/11/05/marco-rubios-tax-plan-gives-a-huge-gift-to-the-top-0-0003-percent/

"SNIP..............

So far, the tax plans proposed by the Republican presidential candidates suffer from two big problems: 1) they cut revenues to the Treasury so aggressively that they’ll either force unrealistically large spending cuts or drive up deficits, and 2) they exacerbate our existing inequality problem by giving the biggest (by far) tax breaks to the richest households. (They may also suffer from a political problem in that, outside of their base, most voters don’t buy this trickle-down business — see Romney, Mitt — but let’s stick with the economics.)

This post focuses on problem No. 2: making the tax code more regressive. In this regard, Sen. Marco Rubio takes the cake. If you were thinking: “what tax change could I implement that would be most helpful to the wealthiest households?” you’d quickly come to the same conclusion as Rubio: zero out taxes on capital gains and dividends. That’s because taxation on these forms of income, currently taxed at a top rate of 23.8 percent, is highly concentrated: according to the Tax Policy Center, 79 percent of the tax take from this asset-based income comes from the top 1 percent, 5 percent from the bottom 90 percent.

Ever since this plan came out, my Center on Budget colleague and tax expert Chuck Marr has been bugging me about these unique data, produced by the IRS, on the 400 taxpayers with the highest adjusted gross income (AGI). Well, to get him off my back, I finally took a close look and … OMG!


The average amount of capital gains held by these wealthiest of taxpayers in 2012, the most recent year for these data, is $230 million. Just to be clear, that’s the average value of capital gains — the money these wealthy people make from selling appreciated assets — held by the richest 400 taxpayers in 2012. Multiply that by 400, and you get back the total taxable base for these folks: $92 billion. Actually, in the context of this discussion, I guess I should call it the existing tax base, since Rubio wants to take it off the tax table.

...............SNIP"

[LiberalArkie]

1. The poor things need it badly. No one has been able to make it to trillionaire yet. They need our

help really bad.

[hifiguy]

2. The only people in the country who have too little

are the billionaires. This country is seriously FUBAR'd.

[SheilaT]

3. Unfortunately,

although "They may also suffer from a political problem in that, outside of their base, most voters don’t buy this trickle-down business " their base includes a lot of people who are not in the top 1%, or even the top 10%, and they STILL vote Republican.