Hillary Clinton zeroes in on capital gains: About-face?
The Democratic contender is set to propose a revamp to capital-gains taxes as part of her bid to distinguish herself and her economic policy from her rivals.
Hillary Clinton continues to place her economic agenda at center stage.
The Democratic presidential contender will propose an overhaul to capital gains taxes that would tax some short-term investments at a higher rate in a bid to emphasize long-term growth, a campaign official said Monday.
The proposal, which Mrs. Clinton is set to lay out in a speech later this week, is part of the former secretary of State’s effort to distinguish herself when it comes to economic policy from her rivals in both the Republican and Democratic parties. Her approach, she said in a recent address, will be focused on “growth and fairness” in order to get the economy moving again full-speed.
The new proposal, first reported by the Wall Street Journal, is one of a number of measures designed to address what some experts see as corporate strategy’s excessive focus on quick profits, including capital gains – the profits made on selling capital assets such as shares or real estate.
Though still being finalized, the plan would create a sliding rate scale that would depend on the length of time an investment is held, according to the Journal.
Investments held for two to three years would be taxed higher than the 28 percent President Obama proposed earlier this year for top earners, who at present have a 23.8 percent capital-gains tax rate. Rates for investments held less than a year, which currently top out at 39.6 percent for the highest earners, would remain the same, the Journal reported.
The plan would also include other rate changes, with the lowest rates provided for investments held the longest.
The proposal appears to be a shift from Clinton’s stance when she last sought the party’s nomination in 2008. Then, she vowed not to raise capital gains tax rates above 20 percent, if at all.
The plan, however, is in line with Clinton’s attempt at setting herself and her policies apart from her rivals. During last week’s speech in New York, Clinton talked about the need to support workers, particularly women in the workforce, and reform financial institutions.
Her speech met a lukewarm response from both Wall Street and its reformers, and some see her upcoming address on capital gains to be more of the same.
“My gut instinct is this is going to sound good but it’s not going to change very much,” Douglas Holtz-Eakin, a Republican economist, told the Journal. “It’s just not that powerful.” He noted that the tax code already requires investments to be held for a year and is skeptical about how much difference increasing the time period would make.
But some say there’s potential in Clinton’s approach.
Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth, told CNN that Clinton is “laying out an agenda that looks at what inequality means for families up and down the income distribution, what we can do to fix it, and it’s really exciting to see a politician take up a very serious set of research ideas and bring them into the public debate.”
This report contains material from Reuters.