Geithner Confused on What “Business-Friendly” Means
Posted by Brian Garst on July 8, 2010
Treasury Secretary Timothy Geithner took to “The Kudlow Report” recently to tout the supposedly business-friendly nature of pending tax increases on capital gains and dividends.
Obama administration will keep tax rates at levels that benefit job-creating businesses and limit taxes on capital gains and dividends, U.S. Treasury Secretary Timothy Geithner said on Wednesday.
…”We’re going to make sure that we keep at 20 percent the existing rates on dividends and capital gains,” Geithner said. “We think that’s good policy.”
Capital gains on investments held for at least a year are currently taxed at 15 percent for upper income earners, the same rate as eligible dividends. Without action by Congress the tax rates would revert to 20 percent for capital gains in 2011 and nearly 40 percent for dividends.
If Geithner is accurate in describing the White House’s intention to only allow the dividends tax rate to rise in 2011 to 20% instead of 39.6% as current law has it, that’s certainly good news. But it’s the kind of good news that is only really good in the sense that it’s not totally bad.
There’s still nothing pro-business or pro-growth about allowing the current 15% rates on capital gains and dividends to rise to 20%. At the very least, such an agenda would involve keeping the rates at the current level. But the truly pro-growth policy would be to eliminate such damaging instances of double taxation altogether.
Sorry, the comment form is closed at this time.