Interesting article in today’s New York Times by David Cay Johnston: Big Gain for Rich Seen in Tax Cuts for Investments:
The first data to document the effect of President Bush’s tax cuts for investment income show that they have significantly lowered the tax burden on the richest Americans, reducing taxes on incomes of more than $10 million by an average of about $500,000.
An analysis of Internal Revenue Service data by The New York Times found that the benefit of the lower taxes on investments was far more concentrated on the very wealthiest Americans than the benefits of Mr. Bush’s two previous tax cuts: on wages and other noninvestment income.
Check out these NY Times features:
- A Terrain That Peaks at $33,392 and Bottoms at $21
- Graphics: Who Benefits Most From Tax Cuts on Investment Income
- Graphics: Where the Dividends Live
- Interactive Graphic: Dividends in Your County
See also Frank Pasquale, Necessary Investment Incentives?:
Is there a good policy reason for tax cuts for the superrich? Would they simply refuse to invest if better tax treatment weren’t given—choosing instead, perhaps, to roll around in vaults of money ala Scrooge McDuck? Would they renounce U.S. citizenship and move to the Isle of Man? I’m just trying to understand this policy on a higher level than positive political theory (which would, of course, predict that those best able to invest in money-intensive politics would get the highest returns). I guess I need to start reading the Tax Prof Blog!
The answer to the last question, of course, is yes!
