The simple math that tells you the new GOP tax plan is a scam

By Michael Hiltzik, LA Times
1:52 PM PST, February 26, 2014

The long-awaited Republican tax reform plan was released today by House Ways and Means Committee Chairman Dave Camp (R-Mich). It's being hailed as a breakthrough in putting real reform on the table, but also being instantly eulogized as dead-on-arrival in a Congress that wants no part of any tax reform, now or ever.

Still, it's instructive to examine the Camp plan for a primer on the latest mathematical trickery aimed at making something that preserves, even enhances, tax benefits for the wealthy appear instead to be a tax increase for the wealthy. Nice try, Congressman Dave.

Here's the easiest calculation. Camp says he's eliminating the preferential tax rate on capital gains, and taxing them the same as ordinary income. That would be a big philosophical change and a big tax hike on the rich, if it were true.

It's not true.

Camp's plan exempts 40% of capital gains (and investment dividends) from any taxation at all. How does this work out in real numbers? The top marginal tax rate on married taxpayers today is 39.6% (couples with more than $457,600 income). The top capital gains rate is 20%.

(More here.)