As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, April 28, 2008

401(k) Capital Gains Aren't Taxed At The Capital Gains Rate

It's nice that DFH Atrios and Barack Obama said the exact same thing yesterday to parry the incredibly stupid charge that we can't raise the capital gains tax rate because 100 million people own stock and you'd be hurting working families. The vast majority of "working families" with stock have them tied up in retirement or 401(k) plans, which means they aren't taxed until retirement, and then they're taxed at the normal rate. It's a complete red herring, and it's good to see the argument down pat on all sides of the Democratic spectrum.

UPDATE: K-Drum is right - liberals do this too, when they talk about middle class tax cuts and how gas taxes affect the poor (but the programs created with that money benefit them). And he's right about the solution:

I suppose there are two possible answers to this. The first is for liberals to get better (and braver) about proposing tax hikes. I'm all ears for any bright ideas on this score. The second is to do what Republicans do: propose spending increases and just don't worry about the taxes. If the Washington Post editorial board huffs and puffs, who cares? Eventually things will work themselves out. That's not the way I'd like to see things get done in a perfect world, but we don't live in a perfect world, do we?

I'm more inclined to the former. Taxes are the dues we pay for a free society. It's as patriotic an action as you can make, and those who want to avoid taxes actively hate America and don't think it's worth paying for. That's a little extreme, but I'd love to see liberal lawmakers writing ticky-tack pieces of legislation like changing the name of tax day to "Patriot's Day" or things like that to hammer home this "America is worth paying for" theme.

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