Low Taxes On Capital Gains Drive Income Inequality

The Washington Post noted today that one of the factors driving America’s increasing income inequality is its low tax on capital gains. Capital gains, “which include profits from the sale of stocks, bonds and real estate,” are almost exclusively made by the very wealthy and are taxed at lower rates than wages and salaries. In fact, “over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.” Five Republican presidential hopefuls, including Rep. Michele Bachmann (R-MN) and former Utah Gov. and U.S. ambassador Jon Huntsman, have suggested eliminating the capital gains tax entirely.