Debate Club

Increased Capital Gains Tax, Decrease Corporate Tax

By + More

Yes. Making Mitt Romney pay more in capital gains taxes would both help slow the alarming growth of inequality in the U.S. and, if offset by a decrease in the corporate tax rate, help keep capital and investment within our borders.

According to the non-partisan Congressional Research Service, changes in income from capital gains and dividends were the single largest contributor to rising income inequality in recent years. During that same period, largely due to the tax cuts on capital gains, the U.S. tax system actually became more regressive, as "there was a relatively large decrease in average tax rates for tax filers at the top of the income distribution." Since increases in societal inequality lead to poorer health outcomes and lower social cohesion, as well as undercutting our national creed that every individual has the opportunity to succeed, the pursuit of a more balanced distribution of wealth is in itself a valuable goal.

[Will Dems Call New Tax Law 'The Romney Rule?']

In addition, as pointed out in a recent paper by the Tax Policy Center, an equal rate of taxation on personal income and capital gains could fund a decrease in corporate taxes. This outcome could "increase the attractiveness of the United States for investment by both foreign and domestic companies…reduce the incentive for many to escape the impact of the U.S. corporate tax by investing in lightly taxed foreign companies…and decrease the incentive for companies operating in the U.S. to shift reported income to their non-U.S. affiliates," which when taken together cost the U.S. tens of billions of dollars in lost tax revenues.

[How Mitt Romney Can Make His Tax Returns a Winning Issue.]

The attention that Mitt Romney has brought to the issue of the capital gains tax offers a rare opportunity to not only make our society more equal but also to prevent capital flight. What's more, if an increase in capital gains taxes is coupled with a decrease in corporate taxes, the proposal might even be politically feasible.

Vishnu Sridharan

About Vishnu Sridharan Program Associate with the Global Assets Project at the New America Foundation

Tags
Romney, Mitt
corporate taxes
federal taxes
2012 presidential election

Other Arguments

#1
187 Pts
A Flat Tax Is the Answer

No – A Flat Tax Is the Answer

Daniel Mitchell Expert on Tax Reform and Supply-side Tax Policy at the Cato Institute

#2
28 Pts
When It Comes to Taxes, No One Has Defined 'Fair'

No – When It Comes to Taxes, No One Has Defined 'Fair'

Antony Davies Scholar at the Mercatus Center at George Mason University

#3
6 Pts
Mitt Romney Is the Type Americans Want to Empower Economically

No – Mitt Romney Is the Type Americans Want to Empower Economically

Daniel Hanson Economics Researcher at the American Enterprise Institute

#4
-43 Pts
Punishing the Rich Is a Mistake

No – Punishing the Rich Is a Mistake

Andrew Roth Vice President of Government Affairs at Club for Growth

#6
-70 Pts
Warren Buffett Is Right

Yes – Warren Buffett Is Right

Steve Wamhoff Legislative Director of Citizens for Tax Justice

You Might Also Like


See More