Wednesday, May 14, 2008

Who Deserves a Change in Capital Gains Tax Rate ?

One would have thought that before the National Republican Congressional Committee selected the “Change You Deserve” slogan , it would have asked If it will play in Peoria? But then, since the results of that interim election are already known, the Republicans must have figured that it was a fluke to lose Denny Hastert’s seat to a Democrat. But now after losing House seats in Louisiana and Mississippi, Marc Ambinder asserts, may be the slogan should be ”change or die.”

Bluestem Prairie has provided (as usual) excellent documentation of the co-opting of “Change You Deserve” slogan, but co-opting is not unusual in politics. Heck, the Democrats were proposing a program entitled Leave No Child Behind, that Bush co-opted to No Child Left Behind … so be warned that slogans are just marketing tools.

What we voters need to be concerned about is what the “Change You Deserve” program might include. Personally, I don’t like the slogan … it hits me as a declaratory sentence … this what You Deserve … not what you Want … or Need ... or what is Best for the country. Heck, I would like to see a change in our foreign policy, health care reform, environmental awareness, etc. but from what the Republicans are proposing, I won’t get what I want in a Republican agenda … but just what I Deserve.

So, what are they offering ?

How about HR 5908 which provide a permanent zero percent capital gains rate for individuals and corporations.

Great no taxes for passive investors … shift the focus to paying taxes on working wages.

But let’s examine what that could mean … after all, calculating the capital gains for my 2007 income tax return resulted in a $400 savings. Now, $400 may be a week’s take home pay for some … or a weekend getaway for others.

So, all investors would get some. And that seems to be the Republican philosophy … its share the wealth … as long everybody gets some, everybody wins … even if some may get more than others.

For example, not to pick on any individual, but let’s just look at someone who is in the spotlight considering the proposal for a gas tax holiday. Rex Tillerson is Chairman of the Board of Exxon-Mobil and has one outstanding equity award for 197,307 at a price of $37.12 ( oh, don’t worry, there are more awards he has... that just one .. plus he already owns 929,149 shares). With today’s market value in the $90 range, that would be a tidy capital gain of $52.78 per share …. or $10,432,607.
OK, so $400 for me and $10 million for you.

Some may say that this is an isolated example, but we should have a concern about what motivates legislative proposals. For example, one of the co-sponsors of HR 5908 is James Sensenbrenner (R-IL) who’s net worth is estimated to be at least $21 million and is a stockholder in Exxon-Mobil.

Somehow, I think some think they Deserve more than others.
Now, I am depressed ... I think I need a Venlafaxine.

1 comment:

Anonymous said...

Good post.
Once again, the rich will get richer.