You want the market to go down? All you have to do is start talking like an idiot about raising caital gains tax rates as Barack Obama has just done with CNBCâ€™s Maria Bartiromo. Ben Smith at Politico has this exchange:
BARTIROMO: “How do you plan to change the tax code when it comes to capital gains? How high will that 15 percent rate go?”
Sen. OBAMA: “Well, you know, I haven’t given a firm number. Here’s my belief, that we can’t go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent. I would–and my guess would be it would be significantly lower than that. I think that we can have a capital gains rate that is higher than 15 percent. If it–and if it, you know–when I talk to people like Warren Buffet or others and I ask them, you know, what’s–how much of a difference is it going to be if it’s 20 or 25 percent, they say, look, if it’s within that range then it’s not going to distort, I think, economic decision making. On the other hand, what it will also do is first of all help out the federal treasury, which is running a credit card up with the bank of China and other countries. What it will also do, I think, is allow us to make investments in basic scientific research, in infrastructure, in broadband lines, in green energy and will allow us to give us–give some relief to middle class and working class families who have been driving this economy as consumers but have been doing it through credit cards and home equity loans. They’re not going to be able to do that. And if we want the economy to continue to go strong, then we’ve got to make sure that they’re getting a little relief as well.”
Why are we, a capitalist country, so eager to penalize those that take risks for big gains. Does this idiot not realize how many are employed by companies run by risk takers?
Here’s a rundown of countries and their rates courtesy of Wikipedia:
Argentina – There is no capital gains tax charged in Argentina.
Australia – 50% capital gains tax discount
Belgium – There is no capital gains tax.
Brazil – Capital gains tax is set at 15%.
Bulgaria – There is no capital gains tax.
Canada – Currently 50% of capital gains are taxed
China – Flat 10% of capital gains taxed with traded equities being exempt.
Denmark – Share dividends and realized capital gains on shares are charged 28%
Ecuador – Ecuador does not have capital gains tax for income gained abroad.
Estonia – All earned income from capital gains is taxed the same as regular income, the rate of which currently stands at 21% and is expected to drop to 20% by 2009.
Finland – The capital gains tax in Finland is 28% on realized capital income.
France – Capital gains tax is a flat 16%, with an annual exclusion or allowance of â‚¬5600. Residents pay an additional 11.6% ‘Social Charges’, non-residents are not liable to this
Germany – There is currently no capital gains tax after a holding period of one year for shares
Hong Kong – no capital gains tax.
Hungary – Since 1st of September 2006 there is one flat tax rate (20%) on capital income.
Iceland – In Iceland there is a 10% tax on realised capital gains.
India – Long term capital gains from equities are not taxed.
Ireland – There is a 20% tax on capital gains
The tax rate is 23% on certain investment policies, and rises to 40% on certain offshore gains when they are not declared in time.
Italy – Capital gains are taxed at a flat 12.5%.
Japan – In Japan, there are two options for paying tax on capital gains. The first, Withholding Tax (æºæ³‰èª²ç¨Ž, Withholding Tax?), taxes all proceeds (regardless of profit or loss) at 1.05%. The second method, declaring proceeds as “taxable income” (ç”³å‘Šæ‰€å¾—, “taxable income”?), requires individuals to declare 26% of proceeds on their income tax statement.
Malaysia – There is no capital gains tax for equities
Mexico – There is a capital gains tax, rate unknown
Netherlands – There is no capital gains tax
However a “theoretical capital yield” of 4% is taxed at a rate of 30%.
In other words, all property and savings (with the exception of owner-occupied dwelling, pensions, approved “green” investments and monies below a certain threshold) are taxed at 1.2% as a substitute for capital gains tax.
Also, dividends and “proceeds (Dutch: vervreemdingswinsten) from significant stakes” (e.g. 5% or more of the ownership of a company) are taxed at 25%. So the latter can be seen as a capital gains tax.
New Zealand – New Zealand does not have a capital gains tax in most cases. However, certain capital gains are classified as taxable income in New Zealand and thus are subject to income tax, such as regular share trading.
Norway – The individual capital gains tax is 28%.
Poland – Since 2004 there is one flat tax rate (19%) on capital income.
Portugal – There is a capital gains tax on sale of home and property. Any capital gain (mais-valia) arising is taxable as income.
Currently, for stock held for more than twelve months the capital gain is exempt. The capital gain of stock held for shorter periods of time is taxable on 10%.
Russia – The capital gains tax in Russia is 13% for tax residents and 30% for non-residents.
Singapore – There is no capital gains tax in Singapore.
South Korea – Capital gains tax in South Korea is 11% for tax residents for sales of shares in small- and medium-sized companies. Rates of 22% and 33% apply in certain other situations.
Sweden – The capital gains tax is 30% on realized capital income.
Switzerland – There is no capital gains tax in Switzerland for residents.
Thailand – There is no separate capital gains tax in Thailand. All earned income from capital gains is taxed the same as regular income.However, if individual earns capital gain from security in the Stock Exchange of Thailand, it is exempted from personal income tax.
United Kingdom – All individuals are exempt from CGT up to a specified amount of capital gains per year. For the 2007/8 tax year this “annual exemption” is Â£9,200.
Why should China, Hong Kong and Russia have lower CGT rates lower than the seat of Capitalism?