Making Paris Hilton Pay Her Share For Health Care Reform
Making Paris Hilton Pay Her Share For Health Care Reform
She can afford to pay higher taxes.
One of the many options that the committee reportedly has on the table for covering a portion of the $1.5 trillion cost is applying a 1.45 percent Medicare tax to capital-gains and other non-wage income:
The proposal, modeled after a plan released this week by Citizens for Tax Justice, would force people living off investments to contribute taxes to the health-care system, said Steve Wamhoff, legislative director for the Washington research group…“If the only income Paris Hilton gets is capital gains, stock dividends, interest and other types of investment income, currently she is completely exempt from the one big tax we have right now that is dedicated to health care,” Wamhoff said. “We’re saying that probably doesn’t make sense.”
Estimates show that the measure would raise $100 billion over 10 years, but “the proposal is sure to draw fire from Republicans.” “Any proposal that increases the tax on capital income will ignite supply-side conservatives in opposition, as capital gains taxes are enemy number one,” said said Alex Brill, an economist at the American Enterprise Institute. “This is a tax increase that is easy for Republicans to attack.”
It might be an easy tax increase for Republicans to attack, but it should be an easier one for Democrats to defend. The Medicare payroll tax is the “one important tax we already have that is dedicated to funding health care, but it completely exempts wealthy investors whose income takes the form of capital gains, stock dividends, and interest.” Plus, dividends and long-term capital gains are currently taxed at a far lower rate than income earned by other means, with taxpayers in the 25, 28, 33, and 35 percent income tax brackets paying 15 percent. Before the Bush tax cuts of 2003, the capital gains and dividends rate for people in these brackets was 20 percent.
According to an analysis by Citizens for Tax Justice, if this change occurred, “most Americans would either see no tax increase at all or would see a tax increase of less than $100 a year.” More than 64 percent of the increase would be paid by the richest one percent of Americans, and more than 80 percent would be paid by the richest five percent. And for the tax to not unfairly hit moderate income seniors who live off of investment, some sort of senior exemption would need to be included.
3 Responses to “Making Paris Hilton Pay Her Share For Health Care Reform”
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the rich hates to pay higher taxes, they prefer to go out and party and get DUI’s and go to jail…
July 11th, 2009 at 7:54 amWhat a great idea! We can call it the “Get Whitey” tax. Then, we can organize lynchings of honkies too, and gang rape their wives and steal all their possessions. It don’t matter if they earned their keep or not. It be time
July 11th, 2009 at 3:03 pmto stick it to da man!
It’s better to keep taxes linked to the benefits in question. The sugary drinks tax and such are good for health care. Taxing capital income is better combined with getting rid of regressive and job killing current features of capital tax, as noted in the below and explained further at http://www.sharedeconomicgrowth.org .
American Jobs in a Global Economy
“We very much want to work with others to make sure that we have … as pro-American a tax system for corporations as we possibly can …” Lawrence Summers
The Administration is struggling to fund its spending in ways that would nominally be consistent with the President’s campaign promises. The Obama budget proposed to inflict two substantial tax increases on U.S. corporations with global operations. One would make it more expensive to bring cash from abroad into the U.S. The other would make it expensive (on average 30% more expensive) to pay Americans, rather than citizens of any other country, to perform headquarters jobs such as accounting, IT, or HR. These proposals were supposedly aimed at fulfilling the promise to “end tax breaks for shipping jobs overseas”. While they hurt companies with global operations, it is hard to see how they would do anything other than reduce U.S. jobs.
The President’s problem here, as in other areas, is that in his effort to produce campaign one-liners he misstated the underlying problem. America does not provide tax breaks for shipping jobs overseas. It provides a tax penalty for locating jobs here. That’s a different problem, and it has a different cure.
America is not the powerhouse it used to be, and we need to get used to that fact. Our companies must compete against potent rivals. The foreign operations of those rivals are not taxed at all by their home countries. When the U.S. tries to raise revenue by boosting the current tax on the foreign operations of our companies, we saddle them with a potentially fatal competitive burden. A foreign owned corporation can bring home up to 54% more earnings than its U.S. owned rival from a dollar earned by a factory in a tax favored location. That kind of disadvantage can break a company, destroying headquarters jobs and, in time, even U.S. manufacturing jobs. A company that can’t compete overseas cannot sustain the level of research and development needed to produce the new products it needs to compete here at home. We need to minimize the tax that our companies pay on their foreign factories.
But if tax rates on foreign operations are kept low, that puts U.S. operations at a disadvantage. America saddles its domestic corporate activities with the second highest tax rate in the developed world. Is there a way to reduce this without making corporations even more powerful than they are today, and without aggravating our government deficit or putting an even higher percentage of U.S. income into the hands of the wealthy? Yes there, is, and in fact it’s quite simple.
Corporations could be given a deduction for the dividends they pay to their shareholders. If the corporations didn’t pay out their cash, they would get no tax benefit, so the corporations would not end up with more cash. The revenue loss would be made up at the individual level by taxing the dividends and stock gains the individuals receive. Overall, the individuals would be no worse off than they are today. Why? Because the corporations would have higher earnings due to the deduction, and they would have to pay those earnings out to their shareholders. This increase would exactly match, overall, the tax imposed on the shareholders, so they would come out even. But now there would be no required corporate level tax on U.S. operations. The U.S. would be the best place in the world to put jobs, taxwise. Our companies would be in a position to trounce their foreign-owned rivals. That would eliminate the “tax benefit for shipping jobs overseas” in a way that would make us stronger rather than weaker, with higher employment and higher wages.
So let’s give the President a re-do on his campaign slogans. Mr. President, you may re-word your promise to “provide deficit reducing incentives to create jobs in America”. A new Administration is allowed to make mistakes. It just needs to recognize and correct them before permanent damage is done to our economy.
July 12th, 2009 at 1:41 pm