Rightwing lies about capital gains and dividend tax cuts

[hfojvt]

I recently read Larry Kudlow at the NRO, who wrote:

"The Wall Street Journal’s Steve Moore points out that in 2005, almost half of all tax returns reporting capital gains came from households with incomes under $50,000, while more than three-quarters came from households earning less than $100,000."

except I find, using tax stats from the IRS here:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=1...

In 2005, there were 21,677,179 returns filling out schedule D for capital gains or dividends. Of that number 6,452,405 had income under $50,000. That's only 29.7% NOT "almost half". Of that number 13,859,448 had incomes under $100,000. That's 63.94% NOT "more than three-quarters". However, since they only speak of capital gains, and NOT capital gains AND dividends, they may be correct.

However, keep in mind too, that $50,000 is not actual personal or household income. It is "adjusted gross income". Secondly I note that there were 54,585,560 filers with income below $50,000 who had no capital gains or dividends. Thus, only 10.6% of filers with incomes below $50,000 had capital gains or dividend income (at least outside of a tax sheltered 401K). The real kicker is the answer to the question: "who gets the money?"

The IRS also notes that the lower tax rate for dividends and capital gains saved taxpayers $91.65 billion in 2005. Of that amount $1.198 billion went to taxpayers making less than $50,000 (that's a whopping 1.3%!!! and an average savings of $186!!!) and $4.84 billion went to taxpayers making less than $100,000 (that's a whopping 5.2% and an average savings of $349).

On the other side, the 11,433 filers with income of $10,000,000 or more saved $25.84 billion (28.1% of the benefits going to .05% of the beneficiaries with an average savings of $2,260,124) and the 101,676 filers with income over $2,000,000 got $46.615 billion (50.9% of the benefits going to .47% of the beneficiaries with an average savings of $458,466.)

If you break the numbers down further, the 3.08 million filers with incomes under $30,000 who file Schedule D only get $353.6 million of the savings from the tax cut. Thus, although they represent 47.7% of the filers under $50,000, they only get 29.5% of the benefits. Finally, I am curious as to how the 427,868 filers with incomes below $10,000, approximately 1/3 with incomes below $5,000 are paying ANY tax, much less the $80.7 million that the IRS reports. My strong suspicion is that they are children or other dependents of much wealthier people and thus cannot take a standard deduction. How else do they pay taxes on less than $5,000 when the standard deduction is $5,350 and the personal exemption is $3,400?

So, it's pretty clear who the real beneficiaries are of the lower rates on dividends and capital gains and it's not the few people with incomes under $50,000 or $100,000 with capital gains that Kudlow and the Wall Street Journal are shedding crocodile tears for. Rightwing defenders of tax cuts for the rich always like to point at the large number of poor and middle class who supposedly benefit from their tax cuts (see, almost 14 million people). They do this to hide the much larger number of poor and middle class who do not benefit (about 90%) and the much smaller number of very wealthy (.05%) who get huge benefits (averaging over $2,000,000!!).

Tell me again how McCain is a "Straight Talker" when he defends and promotes this dishonesty?

[izquierdista]

1. Straight talker

Blows straight by statistics and logic to end up at the RW talking point.

[hfojvt]

2. Originally he voted against the Bush tax cuts

but now he has flip-flopped.

[hfojvt]

3. This may be as boring as Senator Tim Calhoun

Why does SNL keep bringing that skit back?

This appears to be a re-run anyway.

[Honeycombe8]

4. But McCain didn't say this, you said. Kudlow did. ?????? nt

[hfojvt]

5. McCain uses the same talking points

http://www.nytimes.com/2008/04/16/us/politics/15cnd-mccain.html

"(McCain) called once again for making the Bush tax cuts, which he voted against, permanent, ..."

"Mr. McCain took a few swipes at his Democratic rivals, Senators Barack Obama and Hillary Rodham Clinton, for calling for a rollback of some of the Bush tax cuts. “They’re going to raise your taxes by thousands of dollars per year, and they have the audacity to hope you don’t mind,” "

As if reversing the Bush tax cuts for the top earners will be a tax increase for all of us.

His claim on the AMT is similar

http://www.johnmccain.com/Informing/Issues/0B8E4DB8-5B0C-459F-97EA-D7B542A78235.htm

He claims the AMT is paid "nearly exclusively by 25 million middle class families". That's similar to the 14 million tax filers with income less than $100,000 who would be in the majority of people facing higher taxes if the tax rate on dividends and capital gains went up.

[bighart]

6. Does anyone have stats to backup or refute the statement

that revenue went up when the capitol gains tax was cut? I would be interested to see what the facts are.

[hfojvt]

7. The CBPP was on it!

http://www.cbpp.org/policy-points4-18-08.htm

"The non-partisan Congressional Budget Office (CBO) and the Joint Committee on Taxation have estimated that extending the capital gains tax cut enacted in 2003 would cost $100 billion over the next decade.

The Administration’s Office of Management and Budget included a similar estimate in the President’s budget.
After reviewing numerous studies of how investors respond to capital gains tax cuts, the non-partisan Congressional Research Service concluded that cutting capital gains taxes loses revenue over the long run.

The Bush Administration Treasury Department examined the economic effects of extending the capital gains and dividend tax cuts. Even under the Treasury’s most optimistic scenario about the economic effects of these tax cuts, the tax cuts would not generate anywhere close to enough added economic growth to pay for themselves — and would thus lose money."


As usual, the M$M looooves to repeat Republican talking points like they are facts.