I passed on Mondays GOP debate and tonight's State of the Union; the lowlight of the evening seems to have been the president's desire to have a 30% minimum tax on millionaires. That's likely to play well, given that a certain former private equity CEO with an eye on Obama's job showed that he's paying 15%.
One problem with that proposal is that the people who would be most affected would be people getting capital gains, and some people who aren't normally millionaires in income can become one for a year when selling a family business. For instance, a farmer who has a million-dollar spread may only make $50K a year (farmers usually don't make a good return on their investment), but he'd suddenly be making a million for this year if he sold off the family freehold.
We already have the Alternative Minimum Tax to get some of the game-playing out of the system, but there are reasons why we have special treatment for capital gains; a lot of long-term profit is actually inflation.
Comments