From a New York Times news article today:
Some economists say the cuts are necessary to keep capital from fleeing the United States to lower-tax countries. Scott A. Hodge, president of the conservative Tax Foundation, has written extensively that a capital gains tax is effectively double taxation on profits that have already been taxed at the corporate level. Many investors, and political leaders in both parties, have lobbied for tax cuts on capital gains and dividends by arguing that they spur investment and, therefore, job creation.
But there is little data to support that contention: the nonpartisan Congressional Research Service issued a report last year concluding that tax cuts on capital gains reduce federal revenues and do little to stimulate economic growth. And as income inequality and tax fairness have become major concerns for many Americans, the issue of tax fairness has brought calls to alter the tax code's preferential treatment of investment income.
This is false even-handedness. The Times makes a show of being fair in the first paragraph by rehearsing the arguments for cuts in capital gains taxes. But it shows its real view on the matter in the second paragraph, by accepting the conclusion of one report by the Congressional Research Service — a report for which it provides no hyperlink — as the final word on the matter. In any event, there is "little data" to support the Times's claim that tax cuts on capital gains reduce federal revenues. Here is Obama Treasury department data via the Brookings Institution/Urban Institute Tax Policy Center:
|Year||Max. Long-Term Cap. Gains Rate||Revenue|
Cut the rate, and the revenue rises. Raise the rate, and the revenue declines. Even Charlie Gibson gets it. Why can't the Times?