OK, so a lot of the discussion has centered around extending Bush-era tax cuts for high-income individuals. Republicans refuse to compromise. Democrats feel a need to capitulate in order to spur middle-class economic growth and create jobs.
Much of the focus has been on income, but the real wealth disparity in this country could be ameliorated more quickly by allowing more high-wage earners to keep more of their money, thereby creating more new wealth and competing with old money.
So, what if the compromise (which appears inevitable) focused more on estate taxes, capital gains taxes, and investment fees?
I am not a tax attorney. Don't know enough about it. But what I do know is this: Warren Buffett has said that he pays less in taxes a lower tax rate than his secretary, and the reason for that is that as a member of the investor class, he gets to pay a lower tax rate on capital gains than his secretary does on simple income.
So, what to make of this?
Truth is, an awful lot of Americans are still recovering value from the plunge in housing. Many Americans (myself included) have historically seen their home as their nest egg and the investment of greatest value. But the uncertainty in housing makes this a very tenuous time. I, for instance, have seen a modest drop of around 12% in my home value since 2005. (And of course, it remains to be seen whether I could actually sell my place if I put it on the market today.)
Raising capital gains rates could hamper the recovery, or it could stabilize home values by making property owners think twice before they engage in speculative investing in homes. I think we're going to see an increase in property taxes in the near future as state and local governments fight huge budget shortfalls by raising revenue on property taxes. (I predict this will happen within the next 3-5 years, and sooner in many locales, especially the suburbs.)
Transaction fees are another area where revenue could be raised by taxing the investor class and limiting some of the more speculative day trading and investing that we see in today's increasingly volatile stock market.
I am bringing this stuff up because I'm realizing that it's time to think out of the box when it comes to revenue, and it's time for us to come up with smart revenue raising strategies to combat the insanity of the GOP.
The floor is open.