"Most Capital Gains Flow To Millionaires"
Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.
Jack Kemp – once Bob Dole’s running mate and now a top economic advisor to John McCain – defends McCain for supporting the capital gains tax cuts he originally opposed. Kemp repeats the discredited claim that lower capital gains rates produce more revenue. (There’s more on this here, here, and here). And then he says:
It is an absolute, empirically proven fact of tax policy that nearly one-half of all capital gains redound to the benefit of folks earning less than $50,000 a year.
It’s not quite clear what Kemp means by “redound to the benefit,” but if means they get the money then he’s wrong – very wrong. Households earning less than $50,000 a year collected a mere 2.5 percent of capital gains in 2005, according to the Tax Policy Center. Families earning more than $1 million a year collected 59 percent of capital gains. Moreover, most middle-class families with capital gains hold their investments in retirement accounts shielded against capital gains taxes.