Gingrich Proposes A "Take Home Pay Raise" That Would Only Benefit The Wealthy

Abolishing The Capital Gains Tax Would Favor The Rich, Value Wealth Over Work

Newt Gingrich Proposed Abolishing The Capital Gains Tax:

Abolish the Capital Gains Tax

To compete with China for news jobs and investment we need to match their capital gains tax:  It's zero.  

If we want our children and grandchildren to live in the most productive country in the world, we need more than short-term, government make-work jobs.  We need the investment required for new factories, new companies and new technologies to create long lasting jobs.

Abolishing the capital gains tax would produce such investment. [Newt.org, accessed 7/29/09]

Favoring Wealth Over Work Is The Wrong Solution For America's Economic Troubles.

Preferential Rates For Capital Gains Favor Growing Wealth Over Hard Work.  Currently, earned income and payroll taxes are much higher than those on capital gains. According to a report published by the Center for American Progress, "provides a significant incentive for high-income individuals to avoid their tax obligations by receiving compensation in the form of capital gains rather than ordinary income." [Center for American Progress, "Progressive Growth," January 2008]

CAP: "Preferential Rates For Capital Income Provide A Substantial Tax Break To Those Who Have Significant Wealth." According to the Center for American Progress, "the preferential rates for capital income provide a substantial tax break to those who have significant wealth. More than half of all capital gains and dividends subject to preferential rates are realized by those making over $1 million per year." [Center for American Progress, "Progressive Growth," January 2008]

As Noted By Michael Ettlinger, Vice President For Economic Policy At The Center For American Progress Action Fund:

Tax Cuts Don't Pay For Themselves Or Produce Growth: The idea is brought to you by the same crowd that has been promising that tax cuts for the wealthy pay for themselves since the late 1970s. Instead, these policies have produced trillions of dollars of government debt. And, for all that debt, what they haven't produced is particularly strong economic growth. In particular, they haven't produced the investment growth bragged about. [Wonk Room, 9/23/08]

80% Of American Corporations Pay No Taxes

Newt Gingrich Proposed Reducing The Corporate Tax Rate:

The Left loves to demonize corporations, but when you add together state and federal taxes, American corporations pay the highest taxes in the world.

We believe that by matching the Irish corporate tax rate of 12.5 percent, America would become the most desirable economy in the world to open a factory, create a new job or develop a new production.

And that means more jobs for American workers. [Newt.org, accessed 7/29/09]

Newt has his facts wrong:

GAO: 80% Of Companies Pay No Taxes.  As reported by Congressional Quarterly, "Small companies were much more likely to pay no taxes than larger companies. Still, more than 3,500 large domestic corporations - with more than $250 million in assets or $50 million in gross receipts - did not pay taxes in 2005. The report said about 80 percent of the companies studied paid no taxes because they didn't generate any profit after expenses. Money-losing companies can legitimately owe no tax, and others can use provisions of the tax code to lower or eliminate their liability." [Congressional Quarterly, 8/12/08]

ABC News: "Two-Thirds Of U.S. Corporations Paid No Federal Income Taxes Between 1998 And 2005." As reported by ABC News, "Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress. The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period. Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate." [ABC News, 8/12/08]

CQ: "Creative, Rule-Stretching Use Of Transfer Pricing Can Allow Companies To Push Their Profits Into Lower-Taxed Jurisdictions." According to Congressional Quarterly, "Another possibility could be the use of transfer pricing, which companies use to account for transactions between subsidiaries in different countries. Creative, rule-stretching use of transfer pricing can allow companies to push their profits into lower-taxed jurisdictions. The report does not attempt to examine whether illegal transfer-pricing caused the difference between foreign and domestic companies." [Congressional Quarterly, 8/12/08]

Eliminating The Estate Tax Would Only Affect 0.2 Percent Of Estates

Newt Gingrich Proposed Eliminating The Estate Tax Permanently:

By taxing Americans a second time after they die, government does a fundamentally immoral thing: It tells us that it wants us to work all our lives, save all our lives, and provide for our families.  And then it takes the fruit of that hard work when we die.

If we want to be a pro-work, pro-savings and pro-family nation, it's past time we stop punishing Americans who work, save and provide for their families. [Newt.org, accessed 7/29/09]

Wonk Room: "This Tax Cut Primarily Benefits Ultra-Wealthy Families Making Up 0.2 Percent Of Estates." As noted by the Center for American Progress Action Fund's Wonk Room:

Gingrich seems to be under the impression that Paris Hilton is a job-creating machine, as this tax cut primarily benefits ultra-wealthy families making up 0.2 percent of estates. According to the Center on Budget and Policy Priorities, "repeal of the tax would add $798 billion to deficits over the first decade in which its effects would be fully felt (2012-2021)," while the Tax Policy Center points out that "the estate tax can't have much effect on hiring by small business because hardly any owners ever face the estate tax." [Wonk Room, 7/23/2009]