More Than Half Of Americans Say Tax Capital Gains Like Work: Survey
Most Americans agree: The U.S. should alter the rules that allowed Mitt Romney to pay taxes at a lower rate than someone in the middle class.
Slightly more than half of Americans say capital gains -- or profits made from investments and property -- should be taxed at the same rate as income earned from labor, according to a New York Times/CBS News poll. Currently, capital gains are taxed at a maximum rate of 15 percent, although certain capital gains can be taxed at a higher rate. The top marginal tax rate for wages is 35 percent.
The findings come shortly after Romney, a top candidate for Republican presidential nominee, released his tax returns following mounting pressure from his opponents. In 2010, Romney and his wife paid a 13.9 percent tax rate -- lower than that of someone earning $50,000 -- on their combined income of between $190 million and $250 million. That's in large part because such a larger percentage of Romney's income comes from capital gains.
Romney's tax returns rekindled a debate over taxation that billionaire investor Warren Buffett fueled last summer when he penned an op-ed calling for the super-rich to be taxed at the same rate as the middle class. President Obama adopted a proposal inspired by Buffett, indeed calling it "the Buffett rule," which he touted as part of his American Jobs Act and in the State of the Union.
The capital gains tax that largely benefits the super wealthy, who make the most off investments, is currently at its lowest rate in decades. In 1978, the tax rate on capital gains was nearly 40 percent, according to a graphic from Visualizing Economics. It then dropped in the 1980s, rose steadily in the 1990s and then dropped again in early 2000s. Today, the top 0.1 percent of American earners are netting half of all capital gains, according to Forbes.
That's costing a federal government a pretty penny. Tax cuts on these investments and other loopholes that benefit the super rich are costing the U.S. Treasury $11.6 million every hour, according to an October report from the National Priorities Project.
But if the wealthy get their way, they'll continue to pay less in taxes. The CBS/NYT poll found that nearly half of Americans making more than $100,000 think they're paying more than their "fair share" of income taxes. That's compared to 45 percent of Americans making between $50,000 and $100,000 and 32 percent making less than $50,000.
This most recent poll isn't the first to gauge American perspectives on taxing the wealthy. Nearly three-quarters of Americans said in a September Daily Kos poll that they support taxing households that make $1 million or more at the same or higher rate as middle-class households.