The Agenda

The CAP Tax Reform Plan

Essentially, the Center for American Progress has devised a way to achieve President Obama’s stated goals of raising substantially more revenue from high-earners than under the Clinton-era tax code while leaving virtually all middle-income and low-income households untouched. The centerpiece of the proposal is a sharp increase in capital income taxation. Though I don’t think the CAP plan is the right way forward, it is broadly in line with what I anticipated over the summer.

Back in July, Keith Hennessey made the following observation:

From a pro-growth perspective, lowering marginal income tax rates by raising capital taxation rates is a bad trade. And both the numbers and politics suggest that much of the higher revenues raised from “eliminating tax breaks” would come from higher tax rates on capital rather than scaling back even more popular tax preferences for homeownership, charity, and health insurance.

The CAP plan entails a higher marginal income tax rate on ordinary income and substantially higher capital taxation rates.

Like James Pethokoukis, my preference would be for a reform of capital taxation along the lines of Clayton Christensen’s recent proposal, which we’ve discussed. Regardless, CAP has done us all a service by providing a detailed illustration of what realizing President Obama’s tax reform priorities will likely entail. 

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

Most Popular

Politics & Policy

Fox News Anchor Shepard Smith Resigns

Fox News Channel's chief anchor, Shepard Smith, announced on air Friday that he would be resigning from his post after 23 years with the network. “This is my last newscast here,” said Smith. “Recently, I asked the company to allow me to leave Fox News. After requesting that I stay, they obliged.” He ... Read More
NR Webathon

Don’t Let Michael Mann Succeed

I  enjoyed the running joke of Jarndyce v. Jarndyce in the great Dickens novel Bleak House, back when I first read it. Little did I know that one day I and the magazine that I love would effectively be caught up in a version of that interminable case, courtesy of a litigious climate scientist with zero regard ... Read More
White House

What Is Impeachment For?

W hat is impeachment for? Seems like a simple question. Constitutionally speaking, it also appears to have a simple answer: to cite and remove from power a president guilty of wrongdoing. Aye, there’s the rub. What sort of wrongdoing warrants removal from power? I’d wager that the flames of ... Read More
Elections

Beto Proposes to Oppress Church with State

Beto O’Rourke’s presidential campaign is within the margin of error of non-existence, but in his failure he has found a purpose: expressing the Democratic id. His latest bid for left-wing love came at a CNN forum on gay rights, where he said that churches that oppose same-sex marriage should have to pay ... Read More