Why does Obama want to raise the top tax rate instead of the capital gains rate?

[yago]

The extremely rich pay taxes on the capital gains rate. The Warren Buffets and the Bill Gates, hedge fund managers and the like.

Raising the top tax rate will only affect the small business owner, doctors and attorneys (and the like).

You hear Warren Buffet "complain" about paying less a percentage than his secretary does. Of course, he pays the capital gains rate on the majority of his income because his earnings come from investments. He doesn't pay the standard rate, and neither do the hedge fund managers and corporate jet owners Obama speaks of so often.

Why does Obama want small business owners, doctors and attorneys to pay more than corporate jet owners, investment bankers and hedge fund managers?

[seager]

If his past actions are any indication he would walk out if he got what he wanted anyway. This is all just chicago politics to him.

[nickson]

The president has suggested doing away with the loophole that allows hedge fund managers to pay caital gains instead of earned income taxes.

You're right in the sense that the rich receive most of their incomes from investments, which are taxed at a much lower rate (max. 25%) than hard-earned income that comes from work. With the exception of closing the loophole for hedge fund managers, neither the president nor most members of Congress have ignored this difference.

Why hasn't President Obama endorsed the People's Budget, which does exactly what you propose? I guess the easiest explanation is simply that Obama is and always has been a moderate--slightly leaning right, at that.

[scirwode]

Raising the capital gains rate would depress investment in businesses. There's no appetite for that right now. You have to deal with the possible in politics (well, I used to think that), and in theory there's more backing for getting the top tax rate up a few points as opposed to a business-only hike.

There is some truth in what you say, though.

[bardoul]

Saying top tax rate is misleading. Use a number instead. Like say those who make over $250,000 a year in PROFIT. Now that's the income bracket he wants to raise taxes on. Most small business owners doctors and attorneys do not make that much profit yearly. Yes there are tax loop holes, instead of addressing each and every loop hole which would take a very very long time to close them one by one. They are trying to give a straightforward, fast approach to the problem.

[weiford]

Investment drives growth. The salaries of overpaid CEO's doesn't. The problem is Obama's and the Democrat's definition of rich. Someone making $250K has more in common with Joe Six-Pack than they do with Warren Buffett.

And I do agree with Obama on one issue. Hedge fund managers should have their income taxed as ordinary income, not capital gains. They make money regardless of how the fund performs.

[anglesey34]

He doesn't want to do that at all. There are exceptions for business people who employ people and earn over the $250K cap until the taxes kick in.

The wealthy are not in such a position and would be heinously loaded with money anyway.

That's the whole point. American society has become a 'class' society with the poor, the middle class and the wealthy and the wealthy now own FAR to much of the 'pie'.

It's time they gave back a huge wad of money they have owed for centuries, let alone decades.

[chay]

because most big companies are moving out of the country
to pay less taxes

look at GE

[sebastiano53]

scruit. Raise both of 'em.