Saturday night tax madness! President Obama’s out with a progressive new tax plan.

January 17th, 2015 at 8:27 pm

In a similar spirit to Rep. Van Hollen’s plan which I covered here earlier, the President goes after wealth inequality by closing a big, bad capital gains loophole and using the revenues to help those on the wrong side of the inequality divide. Over at PostEverything.

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6 comments in reply to "Saturday night tax madness! President Obama’s out with a progressive new tax plan."

  1. Sandwichman says:

    So why then didn’t the Democrats propose this and make it a campaign issue during the 2014 elections?

    • Smith says:

      The tax plan could never be the rallying cry of 2014. The contested seats, those who lost in 2014, were the blue dog Democrats, who ran away from the progressive agenda and association with Obama. Obama held back shifting left in order to assist their campaigns, understandable since Obama ran in 2012 as a centrist. Democrats can push back in the following scenarios:
      1. Republicans fail, giving them an opening, see 1932 and 2008 elections
      2. Democrats succeed, thriving economy gives them electoral leverage to push agenda
      3. Democrats fail, nothing left to lose, realization new ideas are needed instead of Republican light
      4. Leaders already with an agenda lead party (Senators Warren, Sanders, Durbin, Brown Oh, Gov Brown)
      5. Politicians in dire need of protecting their left flank run for office (Andrew Cuomo, Hillary Clinton)
      6. The leader no longer worries about reelection or wealthy campaign donors.

      Their was no progressive agenda in 2008, 2010, 2012, or 2014, all campaigns were geared towards painting Democrats as centrists, Republicans as scary too far right. Only after 2014’s purge of the last Southern Democrats and Obama’s concern for legacy, inclination to solve problems in progressive manner, education in politics, economics, and freedom from having to worry about Republican obstruction, could he proceed. If he’s going to lose in Congress, he might as well at least stand for something, going on the offense might possibly prevent Congress from rolling back his achievements, and the effect of advocating needed change should have a lasting effect.

      Plus it took time (6 years) for him and advisors to think of crafty and clever ways to paint Republicans into a corner. The tax cuts and loopholes closed and transaction tax are ok and helpful, but not substitutes for restoration of Eisenhower tax rates (marginal income and estate tax), closing more loopholes, and funding infrastructure, research, and even more in the way of education benefits than proposed.

  2. Larry Signor says:

    I could get to like this man, President Obama, again. I suspect his Gallup poll for popularity will rise.

  3. Tom in MN says:

    You could have also noted that cap gains in IRA’s (401k, 403b etc) aren’t taxed as gains, so raising cap gains rates has no effect on the average person saving for retirement. It only affects those that max out these types of accounts and have gains in non-qualified accounts. Although there seems to be a loop hole there too as some (like Mitt Romney) seem to have figured out how to put massive amounts of money into IRA’s.

    The other loop hole that needs to be closed is whole life insurance policies. You put money into these policies and it is used to buy stocks which appreciate and when you die there is no tax on the life insurance benefits paid out that include all those gains. This is very similar to the stepped up basis idea that he is going after.

  4. SeattleAlex says:

    I got giddy when I read this yesterday… Several questions though: 1 – Do the tax projections factor in the likely decreased funneling into capital gains into other less taxable assets. Obviously the rich aren’t going to continue handing down these inheritances in the same manner if all the gains would be taxable. B – Realistically do any pieces of this make it into legislation? 3 – For the love of god why not run with thus agenda earlier and just keep hammering away in the face of opposition. I have to imagine the public support is going to be broad.

  5. Dave says:

    I’m not really paying attention anymore. I don’t trust this.

    I think he’s just laying out an agenda that will get him some progressive support for the TPP agreement.

    Fool me once…