Source: Citizens for Tax Justice, October 1, 2008
Americans are in no mood to subsidize Wall Street. This became clear Monday, when the House of Representatives rejected the financial rescue plan that was supported by leaders from both parties as well as the President. Reasonable people can differ on whether the government should step in to prop up the financial system right now. There are progressives and conservatives on both sides of that issue. But what seems indisputable is that Wall Street has mismanaged its affairs and Americans are in no mood to pay for its mistakes.
The new report from Citizens for Tax Justice explains that if Congress is going to enact some rescue plan (which is still uncertain at this point) it would be sensible to include provisions ending the subsidies we are currently doling out to Wall Street. The biggest and most unjustified of these subsidies is the special low tax rate on capital gains and dividends. These tax loopholes subsidize people whose income comes from investments rather than wages, as well the Wall Street brokers who rely on their business.
If conservative lawmakers are sincere about protecting middle-income taxpayers and not giving away the store to Wall Street, then they should join us in advocating a return to President Reagan’s approach of taxing investment profits at the same income-tax rates as wages and other kinds of income.