President Barack Obama’s push to increase the top tax rate to 39.6 percent from 35 percent wouldn’t achieve its purpose of bringing in a lot more revenue for the government, says Joe Scarborough, host of MSNBC’s “Morning Joe” program.
He cites the arguments of legendary investor Warren Buffett and Obama’s former auto czar Steve Rattner to make his case.
“The point Rattner and Buffett are making — and the point we’ve been making on the show for months — is that simply raising the marginal tax rate on the wealthiest Americans from 35 percent to 39.6 percent will do little to bring in additional revenue from the richest Americans,” Scarborough writes on Politico
That’s because these folks “draw most or all of their income from capital gains and dividends,” he says. “These ultra-rich Americans will remain untouched by what is effectively a fantasy rate on ‘income’ unrelated to capital gains or carried interest [a tax break for hedge fund and private equity managers].”
The wealthy have sharp accountants and tax lawyers who see to it that their clients don’t have to pay taxes at the top rates, Scarborough says. “But that’s not the case for small-business owners who make far less but are still subjected to the pain of tax hike plans passed under the guise of making the tax code more equitable.”
The best solution is a minimum tax on millionaires, as proposed by Buffett, or an increase in capital gains and carried interest taxes, Scarborough says.
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