An editorial in today's New York Times calls for imposing even higher taxes on capital gains and dividends:
Tax breaks for dividends and capital gains, however, are not counted as shelters subject to the A.M.T. As a result, the wealthiest Americans — who reap the lion's share of such investment income while enjoying the low tax rates that go with them — are less likely than not-so-wealthy filers to fall into the A.M.T. Income-tax rates on capital gains and dividends top out at 20 percent, compared with a top rate of 39.6 percent on salary and wages. The saving to investors is roughly $90 billion a year. The upshot is that a professional couple with three children in New York City earning $250,000 is more likely to pay the A.M.T. than someone with no dependents in Florida who makes millions a year from a tax-favored stock portfolio.
It's funny how the Times' hypothetical Florida investor is making millions from "a tax-favored stock portfolio" rather than from municipal bonds on which the interest is tax exempt. In fact, the entire Times editorial calling for higher taxes on investment income makes no mention whatsoever of municipal bond interest, which, unlike dividends and capital gains, is entirely tax exempt. It's almost enough to make one think that what the Times is opposed to isn't tax savings for the wealthy, but the idea of investing in the private economy rather than lending money to the government.
Separately, the Times' claim that "Income-tax rates on capital gains and dividends top out at 20 percent" ignores the new ObamaCare tax. Even the center-left Tax Policy Center, which is a favorite Times source for tax information, refers to "the new 23.8 percent rate (which includes the surtax for healthcare) on capital gains for high-income households."
It's one thing to be in favor of higher rates; it's another thing inaccurately to understate the existing rates to try to prop up the argument for higher rates.