Steve Novick is a committed progressive taking on Gordon Smith for the U.S. Senate. You can find out more at the fighter with the hard left hook at his website and help support his campaign at ActBlue.
Today I renewed my call to end the special tax treatment of income from buying and selling stock and other income from wealth, highlighting an analysis in today's New York Times as proof of the utter failure of George Bush/Gordon Smith economics.
Today's Times reports that the average American's income was lower in 2005 than in 2000, adjusted for inflation. In addition, gains in total income gains were concentrated among those making more than $1 million a year. According to the Times, "These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000."
Meanwhile, the article also cited a study by Citizens for Tax Justice showing that "people with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003." Smith cast the deciding vote on passing those tax cuts into law. [108th Congress – 1st Session, HR 2, Vote 196 (51-50), Smith – Y]
This demonstrates the intellectual bankruptcy and fundamental unfairness of the economic theories and tax policies of George Bush and Gordon Smith. They promised that if we just cut taxes on the richest Americans, the economy would take off like a rocket for everybody. Instead, most people are worse off, and the Federal government is deeper in debt. But a few people who were already rich are even richer.
One obvious response to these data is to do what Senator Wyden and I have proposed: End the special tax treatment of people who make their money from wealth. Special low tax rates for so-called 'capital gains' and dividends mean that wealthy people who make their money from stocks pay lower tax rates than people who actually work for a living. The Times article shows that this policy does nothing for the economy, it just puts the Federal government deeper in debt – a debt we'll all have to repay.