As regular readers know, I'm a big fan of Robert Samuelson's views on economic matters. He's got an editorial in today's WaPost that accomplishes two important things. First, it explains how in God's name GE could make over $5B in US based profit and not pay any corporate tax (easy--it lost huge amounts of money in 2008, 2009 and those losses carry over), and it suggests a more business friendly tax scheme that would lower corporate tax rates while raising capital gains taxes.
First of all, we ought to be wary of any raise in taxes on its face. Ultimately, talk like that needs to bear the burden of sense--and in this case, it does. With capital gains rates at 15%, the overwhelming majority of the benefit of this lower rate goes to folks in the upper brackets (the top 1% derive 66% of the benefit)--which Samuelson rightly points out makes little economic sense. Capital gains used to be taxed at the same rate as ordinary income--and I advocate doing so again (whatever tax bracket one is in for income would be the bracket he or she is in for capital gains). I realize I leave myself open to a charge of "soaking the rich", but I see capital gains VERY DIFFERENTLY than I see taxes on income. And oh--by the way--I think EVERYONE's income tax should be cut.