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Presidential Issues: Taxes


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Hillary Clinton’s Upside Down Tax Reforms

July 27, 2015

By Richard A. Epstein

In her recent speech at NYU Stern School of Business, Hillary Clinton put forward a suite of proposals for responding to what she termed “quarterly capitalism,” which leads corporate executives to favor short-term income at the expense of sustainable long-term growth. The single most important feature of her speech is what she did not mention—removing or weakening taxes and regulations that shackle today’s overregulated economy.

In her uneasy effort to sound like a responsible version of the irrepressible Bernie Sanders, she tried to fuse together two progressive themes that are difficult to marry to each other: the promotion of economic growth and greater wage equity, especially for workers at the bottom end of the income scale.

The most novel aspect of her corporate program is to increase the capital gains tax on short-term investments in order to incentivize key corporate officers to invest in the long haul by having high-income taxpayers monitor their behavior. Right now short-term capital gains on assets held for less than one year are taxed at ordinary income tax rates, which tops out at 39.6 percent, to which is added a 3.8 percent net investment income tax, for a total of 43.4 percent.

Read the full article at the Hoover Institute: Hillary Clinton’s Upside Down Tax Reforms

Issue Categories : Hillary Clinton, Taxes