Tag Archives: capital gains tax

White House says capital gains tax would hit 0.3% of taxpayers

By Andrea Shalal and Trevor Hunnicutt

WASHINGTON (Reuters) -President Joe Biden’s forthcoming capital gains tax hike proposal would affect only a 0.3% slice of U.S. taxpayers, a top economic aide said on Monday.

Biden is set this week to propose nearly doubling taxes on capital gains to 39.6% for people earning more than $1 million, Reuters has reported, in what would be the highest tax rate on investment gains since the 1920’s.

The soon-to-be-announced tax hike will treat those investment gains as wages for top earners and applies only to about 500,000 households, according to Brian Deese, who runs Biden’s policy-writing National Economic Council.

“We need to do something about equalizing the taxation of work and wealth in this country,” Deese told reporters. “And that’s why the reforms that the president will lay out are focused on this top sliver of people.”

He said there is no evidence of a significant impact of those capital gains tax rates on long-term investment.

Still, wealth advisers have already started counseling clients on strategies to avoid being clobbered by the new levies, which would need to be approved by a closely divided Congress.

That political process and widespread business group opposition is widely expected to mean a lower tax rate than the White House initially proposes will ultimately be adopted.

Currently, people earning more than $200,000 pay a capital gains rate of about 23.8%, including the 3.8% net investment tax which helps fund the Affordable Care Act, known as Obamacare.

Under the new plan, wealthy Americans could face an overall federal capital gains tax rate of 43.4% including the Obamacare tax. For some Americans living in New York and California, their total capital gains tax rate could exceed 50% when state taxes are included, according to the Tax Foundation.

(Reporting by Andrea Shalal and Trevor Hunnicutt; Editing by Chris Reese and Andrea Ricci)

‘Momentum is on our side,’ Oklahoma teachers union leader declares

As their walk-out for higher wages and increased education spending enters its second week, teachers rally outside the Oklahoma Capitol in Oklahoma City, Oklahoma, U.S. April 9, 2018. REUTERS/Heide Brandes

By Heidi Brandes

OKLAHOMA CITY (Reuters) – Oklahoma teachers carried their walkout over school funding and higher pay into a ninth day on Tuesday as a union leader declared that educators had the advantage of momentum in a battle with the Republican-dominated state legislature.

State lawmakers have approved nearly $450 million in new taxes and other revenues to help fund teachers’ raise pay and boost other education spending since the walkout began on April 2, but the union is pushing for more action to raise overall spending by $600 million each year.

“Momentum is our on side,” president Alicia Priest said in a video posted late Monday night on the Oklahoma Education Association’s Facebook page.

The walkout closed public schools serving about 500,000 of the state’s 700,000 students on Monday, and schools in the state’s largest cities, Oklahoma City and Tulsa, were shut again on Tuesday.

The Oklahoma strike comes amid a wave of action by teachers in states where budgets have been slashed, as measured by per-student spending, over the past decade.

The nonpartisan Center on Budget and Policy Priorities said Oklahoma’s inflation-adjusted per student funding fell by 28.2 percent between 2008 and 2018, the biggest reduction of any state.

A West Virginia strike last month ended with a pay raise for teachers. Educators in other states, increasingly angry over stagnating wages, are also considering walk-outs.

Opponents of the Oklahoma tax hikes say lawmakers could bolster education spending by cutting bureaucracy and waste rather than raising taxes.

Republican lawmakers said they have made major moves to boost education spending and it may be difficult to find more money.

“This year’s education budget, which spends $2.9 billion (a 22 percent increase), has been signed into law. I don’t anticipate that bill being changed this year,” Republican Senate Majority Floor Leader Greg Treat said on Facebook ahead of this week’s legislative session.

Thousands of teachers packed into the state Capitol on Tuesday to urge lawmakers to remove a tax exemption on capital gains that would bring in another $100 million in revenue. They also asked Governor Mary Fallin to veto the repeal of a hotel tax that is valued at an estimated $50 million.

The new taxes and revenue approved by lawmakers translate into an average teacher pay raise of about $6,100.

Teachers want a $10,000 raise over three years. The minimum salary for a first-year teacher is currently $31,600, state data shows.

Graphic – Education funding 2008 thru 2015, click https://tmsnrt.rs/2Iumbck

Graphic – U.S. Teacher Salaries in 2017, click https://tmsnrt.rs/2IsvlGa

(Writing and additional reporting Peter Szekely in New York; Editing by Scott Malone and Jeffrey Benkoe)