Hillary to propose capital gains revamp

Hillary Clinton plans to propose at least a new third rate for capital gains taxes, as the Democratic front-runner plots a framework to increase long-term economic growth in the U.S. 

Currently, the highest-earning taxpayers can owe either a 23.8 percent or 39.6 percent rate on their investment returns. Clinton will propose at least a third rate that would be higher than the 28 percent rate that President Obama has floated for the highest earners, The Wall Street Journal reported Monday.

{mosads}Clinton, taking questions on Facebook on Monday, said that she will be outlining the capital gains revamp and other measures this week to battle what she called “the increase in short-term thinking in the private sector.”

“Both business leaders and labor leaders have been speaking out about this in recent years,” Clinton added. “The increase in short-termism has grown in urgency since 2008, and the urgency of our solutions has to match it.”

Clinton had said that the capital gains rate shouldn’t go higher than 20 percent in her previous presidential campaign in 2008. Since then, Democrats have increasingly made battling income inequality one of their top goals. Clinton’s rivals for the Democratic nomination, like Sen. Bernie Sanders (I-Vt.), have also sharply criticized President Obama’s response to Wall Street’s role in the 2008 fiscal crisis.

The top earners currently pay the 39.6 percent rate – the top income tax rate – on investments held for less the a year. The 23.8 percent rate, which includes a surtax to help pay for ObamaCare, is for more long-term investments. 

The third rate, according to the Journal, would be for investments held for around two to three years.

Right now, the lowest-earning taxpayers don’t pay taxes on capital gains, while more middle-class taxpayers pay a top rate of 15 percent. 

Congress lowered the top capital gains rate to 15 percent under President George W. Bush, before the rate climbed due to the Affordable Care Act and the fiscal cliff deal signed early in 2013.