Bill is an idiot.
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Obama: Who has capital gains nowadays?
His Democratic opponent, meanwhile, has said he would raise the capital gains rate to 20% for couples making more than $250,000 and single filers with incomes greater than $200,000. Obama, who did not change his capital gains stance when he laid out his own economic crisis response Monday, would also eliminate capital gains tax on gains from investments in startup companies.
Obama's advisers attacked McCain's plan for giving more than two-thirds of the benefits to people making more than $1 million a year. They questioned the practical impact of such a measure when the S&P 500 index is down 32%.
"Nobody really has capital gains right now," Obama said. "If the idea is to cut capital gains taxes ... that probably is not going to be particularly useful in solving the financial crisis."
Experts: Limited benefit
Most tax experts, however, said that the difference in the candidates' stances is of minimal importance.
For one thing, the jury is out on whether shareholders change their behavior based on shifts in the capital gains rate, said Clint Stretch, managing principal of tax policy at Deloitte in Washington. It would only make a difference to someone with the potential to have an extraordinary gain, such as the case of successful small business owner who is looking to sell.
Those making more than $1 million, who would get 66% of the benefit, would see their federal tax bill drop by $72,255, on average, while their average federal tax rate would fall by 2.3 percentage points, according to a Tax Policy Center analysis.
Meanwhile, those earning between $75,000 and $100,000, who would get 0.8% of the benefit, would see their taxes drop by $31, on average, but get no reduction on their tax rate, the analysis found.
If anything, slashing the capital gains tax for two years may prompt more people to sell by the end of 2010, injecting more volatility into the stock markets, experts said. |
