Our friend Stephen Moore and Susquehanna International Group founder Jeffrey Yass have
done the math and found that under the leftwing radical tax plan proposed by Democrats Kamala Harris and Tim Walz, half of all corporate profits will go directly to governments.
This is because they plan to raise the corporate income tax to 33% (when adding state and local taxes) and the capital gains tax (a double tax on corporate earnings) to 34%. Add it together and the shareholders receive less than 50% of the returns.
In “Kamala Harris Is Eyeing Your 401(k),” an op-ed in the Wall Street Journal, Moore and Yass observed that while Kamala Harris keeps changing her tax plan, her latest proposal is to raise the corporate tax rate to 28%. She would also raise the top capital-gains tax to roughly 32%, the highest since the 1970s.
At a 28% federal corporate tax and an average of roughly a 5% state and local tax, the government would snatch away roughly 33 cents of every dollar of profit. This leaves 67 cents to the shareholders – you know those evil plutocrats who have stock in their 401(k) retirement funds and those, including unions and local governments, whose pension funds invest in stock.
And it gets worse.
Remember, Harris has said she favors raising the capital gains rate to roughly 32% from 23.8%. Add state capital-gains taxes and the rate can easily reach 36%.
Now for some simple math: What’s 33% + 36%? Those who answered 69% get a cookie, and a government that will take over two-thirds of the income from your stocks before you see a penny.
To be fair noted Moore and Yass, companies could find loopholes and deductions to bring the effective corporate rate lower than the statutory rate. But many of those require companies to follow government orders by spending money on liberal boondoggles, such as green energy.
However, not only do these tax reduction schemes amount to a hidden or backdoor tax, they also may force you to contribute to things to which you object, such as the bird-killing windmills that are contributing to the vast reduction in migratory bird populations.
Treating corporate shareholders as fat geese to be plucked has never grown the economy or improved the quality of life for working families. If Kamala Harris has her way more than 70 million Americans with 401(k) plans and millions more with pension plans or other stock holdings would be made poorer.
There’s only one way to protect your 401(k), pension funds and other retirement savings invested in stocks – vote for Donald Trump and a Republican Congress to make sure Kamala Harris and her Democrat allies never get the chance to implement their confiscatory tax plans.
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